,    5"^ 


'^^ff-VL/iX^^^ 


RIGHT  AND  RICHES 


BY 


CHARLES  O.  McCASLAND. 


Being  a  Scientific  Study   of  Weai^th   and  its   Rei,ations  to 

Producer,  Consumer  and  Society;  The  Cause  of  Want 

AND  its  Amei^ioration;  The  Nature  and  Laws  of 

Money  and  the  Dangers  of  Our  Centrai^ized 

System  of  Banking  and  Corporation 

controi<;    the   el^ements    of 

Collective  Prosperity 

AND  individual 

Success. 


'      11-1     _»,      >»,      J        n     : 


THE    WILBUR    PUBLISHING    COMPANY, 
Pasadena,  Cal. 


!,ff^'"»K^ 


Copyright,  1908,  by  Charles  O.  McCasland. 
All  rights  reserved. 


4     •  C       t 

•      «      « 


•     •      *       ,  •   • 

C         .  «     •  • 


s\'^  TO  THOSE  WHO, 

BY  VOICE  OR  PEN,  BY  PRECEPT  OR  EXAMPLE, 

ARE  STRIVING  TO  INCULCATE 

IN  HUMANITY 

THE  APPREHENSION  OF  TRUTH. 


^ 


SiJ 


Pasade;na,  February,  1908. 


CONTENTS. 


INTRODUCTION. 

PAGE 
Introduction   5 


PART  II. 

PROPERTY. 
CHAPTER 

I — Ownership — Its     Justification     Under     Different 

Conditions,  the  Main  Inquiry  of  Economics.  .     15 

II — Business — What  is  Its  Rightful  Purpose? 19 

III — Value— Its    Primary    Manifestation.     The    Wide 

Divergence  of  Its  Three  Phases 24 

IV — Property  Essence — Property's  Commercial  Being 

Consists  in  Exchange  Value 33 

V — Property  Evolution — Is  from  the  Power  to  Hinder 

Use    39 

VI — Property  Precepts — Brief  Statements  of  the  Laws 

of  Property   42 

PART  III. 

PRODUCTION. 

I — What  Production  Comprehends — Human  Efforts 

but  not  Natural  Forces 47 

II — Exchange    and    Art — Art,    Division    of    Labor, 

Commerce    49 

III — Labor  and  Wages — Labor  not  Synonymous  with 
Toil.  Education  Makes  Effective,  but  Does 
not  Merit  Increased  Wages 56 

IV — Wealth — How  Important  to  Define 66 

V — Capital,  Increase  and  Interest — What  is  Not  Capi- 
tal. Interest  but  Part  of  Increase.  Loaned 
and  directly  Applied  Capital 69 


PART  IV. 

SHARING  OF  OUTPUT. 
CHAPTEIR 

PAGE 

I — Concession — The  Reason  for  a  New  Term.     The 

Third  and  Greatest  Taker  of  Output 83 

II — "Living"  Rates  of  Interest  and  Wages 93 

III — The  Eminent  Domain  of  Greatest  Efficiency 113 

IV— The  Consumer's  Rights 188 

V— The  Producer's  Rights 137 

VI— Society's  Rights 157 


PART  V. 

REICLAMATION. 

PAGE 
I — PaternaHsm — In    Which    Natural    PaternaHsm    is 

Outhned 167 

II — Title  Limitation — Limitation  in  Degree  and  Dura- 
tion     171 

III — Units,  Monopolies,  Public  Ownership — As  Civili- 
zation Unifies  Mankind,  and  Unitizes  the 
Lines  of  Production 175 

IV — Title  and  Time — The  Limiting  of  Ownership  to 

the  Living    193 

V — Taxation  and  Compensation — No  Taxes  Just  Ex- 
cept for  a  Consideration 307 

VI — Quantitive  Title  Restriction — Has  One  a  Right  to 

Own  the  Whole  Earth? 317 


PART  VI. 

FINANCES. 
CHAPTER  PAGE 

I — Value-Poise — The    Equilibrium     of    Competitive 

Values  of  Commodities 225 

II — Currency  and  Money — The  Vital  Distinction  Be- 
tween Currency  and  Money.  Currency  a 
Medium  of  Exchange — Money  a  Payer  of 
Debts    232 

III — Credit — Should  be  Distinguished  From  Credence 

and  Confidence 255 

IV— Banks  and  Panics 264 

a — The  Recent   Panic — Its  Cause?     Lack  of 

Capital?     Lack  of  Currency? 264 

b — Demand  for  and  Supply  of  Capital.  The 
Nature  of  Capital  Generally  Misunder- 
stood      279 

c — Dilation  of  Concession.  How  the  Great 
Stock-jobbers  Exhaust  the  Wealth  of 
the  Land    284 

d— The    Part    the    Banks    Plav— The    Banks 

Hold,  While  the  Stock-jobber  Milks.  ...  290 

e — Banking  Laws — The  Almost  Criminal 
Ignorance  of  the  General  Public  of  the 
Substance  of  these  Vital  Laws  which 
are  so  Easy  of  Access 292 

f— The  Remedies— To  Cut  Down  Banks' 
Debt-Making  Powers,  and  Make  Them 
Maintain  Actual  Reserve 301 

V — The  Importance  of  Industrial  Corporations — 
Their  Integritv  the  Foundation  of  Industrial 
Stability    ....'. 305 

PART  VII. 

PROPER   USE   AND   PLENTEOUS   SUPPLY. 

I— Waste  and  Want 313 

II — Governmental  Reform  and  Individual  Opportunity  332 


'"For  the  ultimate  notion  of  right  is  that  which 
tends  to  the  universal  good;  and  when  one's  acting  in  a 
certain  manner  has  this  tendency  he  has  a  right  thus 
to  act." — Francis  Hutcheson. 


"Neither  shalt  thou  covet  thy  neighbor's  house,  his 
field,  or  anything  that  is  thy  neighbor's." 


"Seek  not  proud  tvealth;  but  such  as  thou  mayest  get 
justly,  use  soberly,  distribute  cheerfully." — Bacon. 


The  Author's  Purpose. 

OVERTY  is  a  disease,   a  wide-spread,  contagious 
disease.     It  is  a  form  of  starvation.     Now,  starva- 
tion does  not  always  mean  a  lack  of  a  sufficient 
food  supply,  but  often  simply  a  malnutrition  or 
failure  of  assimilation.     Is  the  wide-spread  suffering  from 
poverty,  which  appears  to-day,  due  to  a  lack  of  abundant 
supply  or  to  non-assimilation? 

Economic  writers  quite  generally  hold  that,  collectively, 
the  supply  is  sufficient  if  properly  diffused  among  the  in- 
dividuals, and  their  efforts  are  principally  directed  to  the 
evolution  of  a  sociologic  system  which  shall  give  the  proper 
distribution.  This  they  hope  to  see  accomplished  by  the  re- 
form of  industrial  laws ;  but  the  fact  that  they  overlook  is 
that  poverty  is  a  condition  of  the  individual.  It  is  not 
enough  that  measures  be  taken  to  prevent  the  spread  of  a 
fever;  it  is  even  more  important  that  a  remedy  be  offered 
the  individual;  for  we  may  have  a  healthy  community,  just 
as  we  may  have  a  moral  community,  only  through  the  health 
or  morality  of  the  individual ;  and  to  these  ends  legislation 
is  not  an  effectual  cause,  but  only  an  encouragement. 

The  cure  of  poverty  can  only  be  wrought  out  through 
scientific  understanding.  In  recent  years  every  progressive 
concern,  producing  a  certain  line  of  materials,  is  coming  to 
have  chemists  expert  in  the  analysis  thereof;  and  this  has 
resulted  in  the  greatest  advance  in  such  industries.  Now 
the  remedy  for  poverty  is  plenty  and  its  proper  application 
to  the  individual  need;  therefore,  to  banish  or  ameliorate 
the  suffering  from  poverty,  we  require  a  scientific  analysis 
or  understanding  both  of  wealth  and  individual  need.  I 
have  herein  attempted  such  analysis. 


2  THE  AUTHOR'S  PURPOSE. 

While  I  do  not  presume  to  have  developed  this  reasoning 
into  a  finished  science,  I  hope  to  have  made  some  progress ; 
for  however  much  I  may  fall  short  of  the  purpose  in  the 
treatise  hereby  presented,  I  have  at  least  definitely  de- 
termined that  when  the  pure  science  of  economics  is  ap- 
prehended, it  will  afford  the  individual  a  sure  means  of 
success  and  present  abundance ;  and  ultimately  it  will  bring 
about  perfect  social  conditions  of  plenty  and  peace.  Any 
economic  teaching  which  does  not  present  to  the  individual 
a  sure  recipe  for  such  success  is  lacking  in  its  science. 

In  the  hope  that  in  some  small  measure  at  least  the  effort 
to  improve  social  conditions  may  be  promoted,  and  that  even 
a  few  of  tired  humanity  may  be  helped  to  a  solution  of  their 
problems,  this  volume  is  submitted. 

Charles  O.  McCasland. 


PART   ONE. 


Introduction. 

The  Widespread  Evil — Want. 


Introduction. 

"/  am  come  that  they  might  have  life,  and  that  they 
might  have  it  more  abundantly."' — John  x:10. 

HE  multitudes  of  mankind  pass  the  greater  part  of 
their  waking  hours  strugghng  to  get  the  bare 
necessities  of  Hfe — food,  shelter  and  clothing — 
with  now  and  then  a  mere  trifle  of  luxury. 

Why  is  it  such  a  task  to  live? 
No  farmer  would  keep  a  species  of  stock  that  would  no 
more  than  earn  its  feed.  No  manufacturer  would  keep  an 
engine  that  would  no  more  than  run  itself.  Is  man  alone 
unprofitable?  Is  he  for  no  use  but  to  feed  himself?  Sure- 
ly life  is  for  more  than  mere  subsistence. 

Nor  is  it  the  poor  alone  whose  time  is  so  engrossed. 
Many  of  the  minority  who  have  secured  command  of  a 
competence  for  many  years,  or  even  for  life,  are  slaves  to 
the  habit  of  gathering  more  and  to  the  fear  of  losing  what 
they  have.  They,  too,  go  on  with  the  grind  of  getting 
wealth,  never  taking  time  to  live  and  do  good. 

A  certain  farmer  made  a  practice  of  producing  and  sell- 
ing clover  seed,  whose  only  use  is  to  be  sown.  His  little 
child  was  asked  by  another  child,  "What  is  clover  for?" 
"Why,  to  raise  seed,  of  course !" 

Quite  as  lacking  in  vmderstanding  is  the  common  state- 
ment that  immigrants  are  needed  to  promote  the  real  estate 
interests  of  a  place,  or  that  the  proper  business  of  women 
is  to  keep  house  and  raise  children.  Indeed,  the  highest 
business  of  both  men  and  women  is  to  raise  mankind — 
themselves  included — to  their  natural  estate.  Epictetus  says 
the  beasts  were  made  to  bear  burdens,  but  man  was  made 
to  express  God. 


6  RIGHT  AND  RICHES 

The  Great  Cause  who  authorizes  our  being  provides 
continuous  profusion  for  our  needs.  Is  there  not  abundant 
food  supply  as  well  as  the  materials  for  fabrication  of 
wares?  For  fuel  great  forests  ever  ready  to  renew  them- 
selves. Strata  of  coal  unmeasured  are  accessible  to  man ; 
oil  is  ready  to  spout  high  into  the  air ;  the  great  cry  we  hear 
is  for  a  market.  Armies  are  sent  out  to  fight  and  die  con- 
quering a  market  where  goods  may  be  shipped.  Yet  how 
many  at  home  are  hungry  and  cold  and  shabby? 

When  some,  by  progressive  thought,  with  improved 
machine  or  process  have  made  possible  a  profusion  where 
previously  there  had  been  but  meagre  supply,  lovers  of  hu- 
manity have  hoped  that,  with  repeated  discovery,  all  might 
share  in  the  good  things  of  life.  Yet  art  after  art  has  been 
revolutionized  and  still,  with  ships  and  cars  of  multiplying 
capacity,  loaded  with  wares  of  finer  and  finer  make,  millions 
are  suffering  for  the  plainest  wants.  The  following,  from 
"Social  Unrest,"  by  John  Graham  Brooks,  instances  some 
of  these  processes : 

"The  cheapness  and  abundance  of  grain  foods  is  explained 
when  the  story  of  machinery  has  been  told.  The  steam-going 
plow,  combined  with  a  seeder  and  a  harrow,  has  reduced  the 
time  required  for  human  labor  (in  plowing,  sowing  and  harrow-  • 
ing)  to  produce  a  bushel  of  wheat  from  an  average  of  32.8 
minutes  in  1839  to  2.2  minutes  at  the  present  time.  It  has  re- 
duced the  time  of  animal  labor  per  bushel  from  57  to  1^ 
minutes;  at  the  same  time  it  has  reduced  the  cost  of  human 
and  animal  labor  in  plowing,  seeding  and  harrowing  per  bushel 
of  wheat  from  4  cents  to  1  cent. 

"Before  Whitney's  invention  it  required  the  work  of  one 
person  10  hours  to  take  the  seed  from  one  and  a  half  pounds 
of  cotton.  The  machine  will  now  do  in  the  same  10  hours  more 
than  4000  times  as  much.  That  10,000,000  bales  can  be  marketed 
in  a  season  and  that  cloth  is  so  cheap  is  no  longer  a  wonder. 

"A  linen  sheet  that  once  cost  30  days'  labor  can  now  be 
made  in  seven  hours.  A  steam  shovel  will  do  in  eight  minutes 
what  one  man  can  do  with  difficulty  in  10  hours.  The  dirt 
may  be  unloaded  from  a  train  of  cars  in  six  minutes  that  would 


INTRODUCTION  7 

require  with  a  shovel  a  day's  work  of  10  men.     A  stone  crusher 
will  perform  the   work  of  600  men. 

"Few  material  blessings  bring  more  comfort  to  every  class 
in  the  community  than  good  road.s.  To  none  is  the  advantage 
greater  than  to  large  sections  of  the  relatively  poor,  as  in 
country  districts.  Yet  the  rapid  growth  of  these  highways  is 
almost  exclusively  the  result  of  the  machine.  Yet  with  all  this 
multiplication  of  output  thousands  die  for  want  of  proper  food 
and  shelter." 

It  cannot  be  denied  that  a  larger  percentage  of  people 
have  acquired  and  are  still  acqtiiring  a  reasonable  amount  of 
useful  things ;  but  the  millions  suffer,  though  in  some  de- 
gree less.  The  misery  in  the  tenement  slums  of  the  great 
cities  is  not  less  than  that  of,  perhaps,  the  majority  in  the 
average  rural  districts ;  although  it  is  common  for  certain 
writers  and  speakers  to  represent  all  outside  of  cities  as 
blossom  and  sunshine.     Still  there  is  improvement. 

Notwithstanding  the  evidence  of  greed  among  the  most 
wealthy,  benevolence  and  charity  are  multiplying.  The  city 
stricken  by  storm  or  catastrophe  finds  prompt  and  abiuid- 
ant  relief.  Institutions  of  benevolence  find  readier  sup- 
port, education  is  freer  each  year.  Chattel  slavery  has  been 
almost  everywhere  abolished.  Apprenticing  of  children  by 
articles,  equal  to  enslavement,  to  learn  trades,  has  been 
largely  abandoned.  Many  worthy  laws  have  been  enacted 
and  cruel  ones  repealed.  Child  labor  is  being  abolished  in 
many  States.  Contracting  of  service  for  a  period  of  time  has 
been  abolished  pretty  generally.  But  as  one  means  of  de- 
spoiling the  many  by  the  few  is  done  away  with,  another  is 
invented.  The  greatest  legal  managing  skill  is,  of  course, 
employed  by  the  greatest  wealth. 

What  is  needed,  to  bring  the  results  of  genius  and  in- 
tellectual progress  to  the  uses  of  the  masses,  is  education  of 
the  masses  to  broader  outlook  and  nobler  purpose.  It  is  es- 
sential to  arouse  a  desire  for  better  things  among  them. 
They  must  come  to  think  and  know  that  such  things  are  for 
them  and  may  by  proper  effort  be  had  by  them.     It  is  lack 

2- 


8  RIGHT  AND  RICHES 

of  intelligent  plan  for  Society  more  than  criminal  intent  of 
individuals  that  causes  the  trouble.  Sir  Oliver  Lodge,  in 
his  address  to  the  Social  and  Political  League,  asks :  "Is  it 
possible  to  reconstruct  society  on  a  scientific  basis  ?" 

The  custom  of  allowing  absolute  ownership  of  land,  he 
held,  was  responsible  for  many  social  evils,  and  to  him  it 
was  a  most  extraordinary  and  amazing  thing  that  any  man 
had  the  right  to  sell  a  piece  of  England. 

The  law  of  inheritance,  he  likewise  held,  would  also  have 
to  be  considered.  The  idea  that  people  might  live  without 
working,  and  yet  without  disgrace,  was  responsible  for 
much  incompetence  and  some  misery. 

"All  should  have  leisure,"  he  writes,  "but  none  should 
be  completely  idle,  save  on  pain  of  starvation  or  the  dis- 
ciplinary drill  of  prison." 

From  mere  generalities,  Sir  Oliver  passed  to  specific  con- 
structive reform,  and  expressed  the  opinion  that  the  work- 
houses and  jails  should  become  manufactories  for  human 
beings.  "Paupers,"  said  Sir  Oliver,  "must  be  shown  how  to 
live,  how  to  work,  how  to  develop  their  faculties." 

There  are  certain  natural  laws  underlying  business 
which  should  be  taught  to  the  children  as  well  as  adults  un- 
til universally  understood.  One  man  working  with  his  axe 
in  the  free  woods  can  easily  understand  the  quantity  of 
property  he  is  developing.  But  industries,  run  by  hundreds 
of  heads  and  thousands  of  hands,  whose  materials  are 
brought  from  every  quarter,  and  w^hose  product  is  sent  to 
the  furthest  parts  of  the  globe,  cannot  be  so  easily  under- 
stood. Such  an  enterprise  requires  intricate  systems  of 
bookkeeping  and  tabulating  to  properly  be  comprehended. 
It  is  only  recently  that  proper  system  in  accounts  has  been 
appreciated  even  by  these  greater  concerns,  but  its  efifects 
have  been  astonishing. 

So  the  increased  complexity  of  our  social  system  re- 
quires, and  in  a  measure  is  beginning  to  receive,  the  help  of 


INTRODUCTION  9 

scientific  treatment  and  analysis.  Our  Federal  Government 
is  rapidly  spreading  the  benefits  of  science.  The  next  great 
step  should  be  to  replace  the  lawyer  majority  in  legislative 
bodies  with  practical  men  of  afifairs — merchants,  teachers, 
mechanics,  engineers,  women — persons  whose  thought  is 
forward,  progressive,  effective,  free  from  tradition  and 
musty  precedent.  We  should  take  a  lesson  from  the  great 
corporations  and  employ  captains  of  thought  and  accomp- 
lishment to  do  our  legislating  instead  of  those  whose  train- 
ing has  been  to  obstruct  and  delay. 

All  should  enjoy  the  blessings  of  science  and  progress, 
preference  being  given  to  those  who  cause  good  things  to 
be,  and  in  the  degree  that  they  know  their  highest  use. 

Why  does  our  Government  have  schools  for  the  training 
of  soldiers  and  marines  and  none  for  statesmen  and  econ- 
omists?     Says  George  C.  Lorimer  in  "The  World  To-day:" 

"It  is  not  uncommon  for  the  existence  of  the  slum  to  be 
attributed  to  the  viciousness  of  its  denizens,  as  though  that 
were  the  sole  cause  of  its  origin.  The  police  and  the  church, 
with  equal  frequency,  are  held  responsible  for  its  continuance. 
Poor  human  nature,  I  admit,  cannot  be  exonerated  from  all 
blame;  and  municipal  and  ecclesiastical  authorities  presumably 
might  do  better  work.  The  more  I  reflect,  however,  on  the 
problem,  the  more  I  am  convinced  that  the  root  of  the  evil  is 
rather  economical  than  civic  or  religious.  So  long  as  industrial 
methods  are  what  they  are,  so  long  as  the  blundering  or  the  self- 
ishness of  modern  trade  methods,  and  the  stupidity  of  the 
recklessness  of  politicians  continue  to  render  it  possible  for  a 
few  men  to  own  most  of  a  nation's  wealth,  and  increasingly 
difficult  for  the  masses  to  make  a  decent  support;  so  long  as 
the  land  is  burdened  with  such  a  curse  as  the  saloon,  which 
wastes,  not  onlj^  wealth,  but  the  source  of  wealth,  the  produc- 
tive energy  of  manhood,  so  long  the  slum  will  flourish,  to 
plague  and  disgrace  its  abettors.  Christianity  and  philanthropy 
are  engaged  at  present  in  a  hopeless  task.  They  may  do  some- 
thing— much.  It  is  foolish,  however,  to  expect  them  to  succeed 
as  long  as  the  industrial  system  is  what  it  is.  ruled  by  a  mis- 
leading idea  and  enforcing  unscientific  principles.  If  the  slum 
is  to  be  suppressed  more  attention  must  be  given  to  economics." 


10  RIGHT  AND  RICHES 

But  where  shall  we  find  the  vital,  effectual,  and  infallible 
principles  of  economics,  both  for  individual  and  State,  save 
in  the  teachings  of  Christianity?  When  we  read  these 
teachings,  let  us  take  them  at  what  they  say.  Let  us  con- 
sult our  lexicons  as  to  the  meaning  of  the  words  we  read, 
and  not  tradition. 

Business  is  subject  to  scientific  analysis.  That  is  true 
as  well  of  public  as  of  private  business.  But  what  is  coimted 
"good  business"  is  often  no  business  at  all,  and  what  is 
called  law  is  often  but  the  authorization  of  outlawry  and 
plunder. 

The  basic  principle  of  true  business  and  true  govern- 
ment is  the  golden  rule. 

Someone  has  said :  "We  are  learning  that  the  Golden 
Rule  and  the  law  of  self-preservation  run  parallel.  Applied 
to  commercialism,  the  Golden  Rule  is  to  make  money  so  as 
to  give  a  benefit  also  to  him  from  whom  you  make  it ;  and 
that,  too,  is  common  sense." 

The  great  trouble  is  our  reluctance  to  accept  what  is  new. 
We  cling  to  old  laws  and  precedent  until  some  cataclysm  of 
suffering,  sentiment,  or  bloodshed  arouses  us.  We  sit  by 
idly  and  see  some  person  or  corporation  quietly  get  posses- 
sion of  all  the  coal,  oil,  lumber,  borax,  or  other  necessity, 
and  never  stir — unless  perhaps  to  selfishly  try  to  corner  a 
little,  too — when  if  we  were  wise  and  brave  and  honest,  we 
should  rise  up  and  sound  the  alarm,  that  the  peoples'  birth- 
right is  being  taken.  When  appealed  to,  let  us  not  like  Cain 
reply:  "Am  I  my  brother's  keeper?" 

But  we  are  told  such  things  are  legal,  they  always  were 
so.  True ;  but  do  you  not  also  know  that  formerly  we  were 
ruled  by  autocrats  and  tyrants,  as  in  Russia,  and  that  we  in- 
herited the  laws  and  spirit  of  such  savage  ages.  This  is  a 
thinking  age.  In  former  days  oxen,  or  women,  drew  the 
loads  and  the  fickle  wind  was  depended  upon  to  move  ships. 
Now  we  use  science  to  do  such  things  by  a  better  and  surer 


INTRODUCTION  11 

way.  We  do  not  in  mechanics  and  industry  look  to  the  dark 
ages  for  a  precedent.  Why  should  we  in  law  .-^  If  a  thing 
is  wrong  in  society,  we  should  know  that  there  is  a  scientific 
remedy. 

The  scientific  basis  of  all  true  society  is  Justice.  Ac- 
quirement of  property  should  be  only  equivalent  to  what  is 
given  in  return.  "For  Value  Received"  should  be  the  test 
of  title. 

When  one  has  millions  of  wealth,  the  question  should  be, 
what  return  did  he  give  to  those  who  conferred  it  upon  him  ? 
What  reward  did  the  public  receive?  None?  What  legis- 
lation sanctioned  such  acquirement?  Let  it  be  at  once  re- 
pealed. 

Honor  to  those  who  master  the  secrets  of  nature,  who 
through  invention,  organization  and  system  wrest  from  na- 
ture abundance,  where  she  has  given  sparingly.  But  down 
with  those  systems  which  reach  out  and  take  not  alone  the 
apples  and  grapes,  but  the  trees  and  vines.  Let  us  endeavor 
to  find  some  of  the  principles  of  acquiring  and  creating 
wealth. 

Complaint  is  made  that  economic  science  is  not  practi- 
cal. The  same  is  said  of  Christianity.  Both  are  practical 
in  so  far  as  scientifically  understood. 

The  vital  force  of  Christianity  and  of  economics  is  Love. 
Combination  based  on  greed  is  a  base  counterfeit  of  co- 
operation based  on  love.  Greed  combinations  heap  up 
freight,  but  seldom  is  it  true  wealth ;  often  it  is  a  burden  to 
its  owner.  Love's  wealth  is  like  a  flowing  stream  diffusing 
life. 

In  the  following  chapters  I  shall  endeavor  to  present 
some  of  the  underlying  principles  of  economics  in  such  a 
manner  that  they  may  be  apprehended  by  the  beginner,  and 
at  the  same  time  to  maintain  that  accuracy  of  statement  so 
essential  to  any  permanent  place  in  science.  In  the  light  of 
such  principles  we  shall  seek  remedies  for  the  blighting 
evils  detailed  in  the  foregoing  pages. 


12  RIGHT  AND  RICHES 

The  common  conception  of  economics  is  from  an  in- 
verted viewpoint.  All  the  more  vital  propositions  are  seen 
upside  down.  For  example,  it  is  commonly  thought  to  be 
desirable  to  have  a  given  commodity  dear  by  having  it 
scarce,  when  the  natural,  the  little-child  view,  is  to  main- 
tain a  bountiful  supply  of  everything  so  that  everyone  may 
have  plenty  with  the  smallest  effort.  Happily,  our  prevail- 
ing business  practices  are  better  than  our  precepts.  The 
apprehension  of  this  true,  scientific  view  will  give  plenty. 
He  who  shall  succeed  in  disclosing  to  humanity  this  true 
focus  of  economic  principles  shall  furnish  the  efficient  rem- 
edy for  poverty  and  distress.  My  first  effort  will  be  to  point 
out  some  of  the  errors  of  our  present  methods,  for  the  per- 
ception of  errors  should  indicate  the  nature  of  the  opposite 
truth.  I  shall  not  tire  the  reader  with  the  refutation  of  the 
mistakes  of  other  teachers,  but  shall  depend  solely  on  the 
correctness  of  the  principles  herein  presented. 

There  has  been  but  one  unerring  Economist — "He  who 
taught  as  one  having  authority."  We  may  without  fear, 
therefore,  take  as  cair  postulates  those  ever-living  truths 
spoken  by  Him ;  they  are  for  the  daily  affairs  of  men,  and 
we  do  no  violence  to  their  more  transcendent  meaning  by 
such  use.  This  is  His  mission  as  stated  in  His  own  words : 
"1  am  come  that  they  might  have  life  and  that  they  might 
have  it  more  abundantly."  The  absolute  principle  of  eco- 
nomics is  embraced  in  His  thesis:  "Seek  first  the  Kingdom 
of  God  and  His  righteousness,  and  all  these  things  shall  be 
added  unto  vou." 


PART    TWO. 


Property. 


Chapte;r    I. 

Ownership. 

11. 

Business. 

III. 

Value. 

IV. 

Property  Essence. 

V. 

Property  Evolution 

VI. 

Property  Precepts. 

CHAPTER  I. 

Ownership. 

HE  desires  of  humanity  constitute  one  radical 
distinction  from  otlier  animals.  The  beast  has 
need  of  food  and  drink,  and  certain  species 
require  other  provisions.  But  the  desires  of  man 
are  without  bounds.  They  increase  with  knowledge  of  the 
world  of  art  and  commerce.  The  savage  wants  a  wigwam, 
a  bow  and  arrow,  a  canoe.  The  devotee  of  luxury  spends 
millions  on  a  home — on  summer  houses  and  winter  houses, 
private  cars,  yachts.  There  is  no  limit  to  such  fancies.  Ma- 
terial desire  seeks  not  alone  what  is  good,  but  what  is  useless 
and  even  harmful.  It  is  prompted  by  the  baser,  as  well  as 
the  higher  motives. 

Whatever  things  are  desired  may  be  termed  Desidera- 
tives. 

Riches  depend  as  much  on  a  knowledge  of  right  use  as 
of  right  production.  The  world  is  rich  in  treasures  of  good 
things  which  the  Creator  has  provided  for  mankind.  They 
are  for  all  and  there  is  no  lack.  Abundance  of  fuel  exists 
in  forest,  mine  and  oil  well ;  food  in  field  and  water ;  fabrics 
supplied  from  animal,  plant,  and  insect.  No  reasonable 
use  can  diminish  this  abundance ;  yet  how  many  lack  for 
things  which  seem  so  essential. 

One  sees  things  all  about  him  which  he  lacks.  He  sees 
fruit  on  a  tree  which  he  would  eat,  but  is  stopped  by  one 
who  says  "That  is  mine." 

"If  to  the  city  sped,  what  waits  him  there, 
To  see  profusion  that  he  must  not  share." 

Merchandise  is  displayed  so  as  to  appeal  to  his  desires. 
He  may  lack  even  bread  to  sustain  life.    There  was  a  news 

15 


16  RIGHT  AND  RICHES 

item  not  long  ago  of  a  man  being  arrested  for  taking  bread 
for  a  hungry,  sick  wife.  Why  should  he  not  take  the  bread 
which  he  so  much  needed?  Because  it  was  owned  by  an- 
other person. 

What  is  the  meaning  of  ownership  ? 

Ownership  is  the  power  to  use  and  to  hinder  others  from 
using  anything. 

In  order  for  a  thing  to  be  property  it  must  be  subject 
to  control.  The  owner  must  be  able  to  prevent  others  hav- 
ing free  use  of  it. 

Some  kinds  of  desideratives  are  not  entirely  subject  to 
control  in  a  commercial  sense.  There  is  no  means  of  hind- 
ering people  from  having  air  to  breathe  so  that  they  will  pay 
for  it  by  the  gallon.  There  is  no  way  of  putting  a  fence 
about  ocean  and  mountains  to  wholly  prevent  people  from 
seeing  them  without  paying  admission.  Many  indeed  do 
suffer  from  lack  of  air,  and  the  most  available  views  of 
mountains  and  sea  are  monopolized ;  still  there  remains 
much  that  is  very  desirable  and  yet  free. 

The  foundation  of  property  is  Hindrance.  The  power 
to  hinder  others  from  using  makes  it  "proper,"  or,  peculiar 
to  us,  makes  the  title  to  it.  That  is  why  ownership  means 
the  power  to  prevent  others  using.  If  every  one  could  at 
pleasure  ride  my  horse,  where  would  my  ownership  be? 

How  is  ownership  instituted? 

Ownership  is  instituted  when  one  gets  the  power  to 
hinder  the  use  of  anything.  What  constitutes  this  power? 
It  may  come  from  superior  muscular  or  other  fighting  abil- 
ity, from  the  control  of  some  organization,  from  custom,  re- 
ligious or  other  sentiment,  or  from  Legislative  enactment. 
Oppressive  Hindrance  depends  upon  the  ignorance,  fear  or 
greed  of  those  hindered. 

What  is  Property? 

Any  desirable  thing  subject  to  the  hindrance  of  an  owner 
is  property. 


OWNERSHIP  17 

What  is  the  most  common  basis  of  ownership  in  civilized 
communities  ? 

Legislation.     Civil  law. 

What  is  Law? 

Law  is  the  enactment  of  a  Government.  Government  is 
an  organization  presumed  to  represent  the  majority  of  the 
people  and  whose  decrees  are  recognized  and  thereby  made 
operative. 

In  crude  civilization,  the  strong  and  athletic  swooped 
down  on  the  weak  and  took  what  they  had  procured  with 
their  toil,  and  by  sheer  muscular  force  appropriated  it  and 
hindered  others  from  using.  Not  alone  did  these  powerful 
persons  take  the  provisions  of  the  weaker,  but  they  formed 
themselves  into  the  government  of  their  community,  the 
chief  as  king,  his  aides  as  barons,  and  took  the  substance  of 
their  own  people,  generation  after  generation. 

The  invention  of  gunpowder  lessened  the  value  of  mus- 
cular strength  in  this  game  of  appropriation,  for  the  little 
Jap  can  outshoot  the  giant  Russian.  The  power  of  the 
press  is  fast  displacing  gunpowder,  but  not  less  do  the 
holders  of  power  take  to  themselves  the  desirable  things. 
The  press  is  supported  by  the  property-owning  class.  Mus- 
cular force  has  given  way  to  law,  but  with  no  more  justice. 
Law  now  gives  title.  Many  writers  attribute  title  to  produc- 
tion, but  the  error  leads  them  into  chaos. 

Title  to  property  in  all  the  earth  rests  on  arbitrary  law. 
And  law  is  in  a  large  measure  made  by  the  property  holders, 
yet  it  depends  upon  acceptance  by  the  masses.  Until  re- 
cently, only  owners  of  real  estate  were  allowed  to  vote.  Law 
must  of  sheer  necessity  make  some  concessions  to  those, 
who  by  care  or  art,  make  things  useful. 

Property  is  from  the  word  "proper"  as  used  in  the 
phrase  "Proper  noun."  It  consists  in  an  enjoyment  or  con- 
trol of  anything  "proper"  or  particular  to  some  person  or 
company  of  persons. 


18  RIGHT  AND  RICHES 

The  word  "proper"  is  thus  used  to  indicate  the  condition 
of  something  being  particular  or  "proper"  to  one's  self ;  has 
precisely  the  same  meaning  as  selfish.  "Property  interests" 
has  identically  the  same  meaning  as  selfish  interests. 

Property  starts  from  and  forever  depends  upon  selfish- 
ness, hence  property  in  goods  is  antagonistic  to  benevolence, 
to  that  benign  use  of  goods  and  service  which  blesses  all. 

The  strict  and  persistent  insistence  on  property  claims, 
we  term  churlishness,  miserliness,  which  amounts  almost  to 
covetousness,  a  violation  of  one  of  the  ten  commandments. 

"All  men  are  born  free  and  equal."  This  equal  right 
is  natural,  reasonable  and  incontestable.  Why  then  does 
government,  which  claims  to  represent  society — mankind  in 
common — give  individuals  the  power  to  hinder  the  use  of 
things  ?    This  is  the  main  inquiry  of  economics. 


CHAPTER  II. 

Business. 

USINESS  is  regarded  as  the  effort  to  acquire 
ownership  of  property.  Private  ownership  is  es- 
sential in  the  present  status  of  civiHzation,  but  the 
present  rules  of  its  apportionment  and  control  are 
the  causes  of  the  greatest  suffering.  "Common"  or  com- 
munistic ownership  of  all  property  is  possibly  only  through 
infinite  improvement. 

An  owner  of  property  may  be  one  person,  or  a  company 
of  persons,  or  an  association.  A  community  may  own  cer- 
tain "property"  for  the  common  good  of  all  its  citizens,  such 
as  schools,  parks,  water  and  light  supplies,  but  this  is  a  mis- 
use of  the  word  property,  for  "property"  refers  not  to  use 
but  hindrance  of  use.  Public  ownership  is  being  advo- 
cated along  many  lines  and  promises  great  benefits. 

What  is  the  basic  statement  of  all  justice  and  equity? 
It  is  that  all  desirable  things  PRIMARILY  BELONG  to 
society. 

What  is  meant  by  society? 

Society  consists  of  the  people  in  a  community  at  any 
given  time.  The  living  generation.  Most  persons  do  a 
service  to  society  which  is  a  just  compensation  for  a  meas- 
ure of  ownership. 

What  generation  had,  or  has,  the  right  of  disposal,  or 
the  right  to  give  title  to  property  ? 

No  generation  has  any  just  pozvcr  to  bind  posterity  to 
any  grant  or  disposal  of  title. 

Bach  generation  has  a  right  to  a  "new  deal ;"  has  a  right 
to  declare  any  title  void,  where  a  full  consideration  is  not 
reserved  for  all  its  members ;  even  the  savage  Maoris  saw 
this. 

19 


20  RIGHT  AND  RICHES 

Upon  what  does  the  right  to  subsistence  depend? 

Upon  being  a  member  of  the  human  race.  We  do  not 
have  to  earn  the  right  to  live.  It  does  not  rest  upon  labor 
or  trade,  professional  or  business  abilit}^,  but  upon  being  a 
child  of  the  One  Father.  It  is  an  inalienable,  God-given 
claim,  which  all  have  upon  the  abundance  of  the  earth.  In- 
fancy, helplessness  or  lack  of  acquisitiveness  does  not  vitiate 
this  claim,  though  such  inability  may  lessen  our  obligations 
to  society.  Each  of  us  is  under  a  moral  obligation  to  create 
an  equivalent  to  replenish  the  general  fund  from  which  we 
partake.  "To  every  one  according  to  his  need,  from  every 
one  according  to  his  ability"  is  a  trite  statement  of  the 
natural  social  status. 

By  what  perversion  of  logic  do  we  justify  enormous  ac- 
quisition of  property  by  fox-like  cunning?  Shrewdness  can 
give  no  claim  for  wealth  nor  dullness  any  reason  for  des- 
titution. 

In  the  old  school  reader  we  had  the  dialogue  about 
knowledge  being  power,  but  that  power  was  not  always  a 
good  thing.  Perhaps  the  native  intellect  of  our  great  money 
kings  rightly  directed  would  be  of  the  greatest  good  to  so- 
ciety. Perhaps  it  is  largely  the  result  of  our  ridiculous  in- 
dustrial system  that  their  intellectual  powers  are  perverted. 

Business  is  beginning  to  be  properly  regarded  by  many 
as  a  service  to  mankind,  and  not  solely  a  selfish  pursuit. 

Elbert  Hubbard  says : 

"Inasmuch  as  business  supplies  the  necessities  of  life,  it  is 
impossible  to  have  a  highly  evolved  and  noble  race  except  where 
there  is  a  science  of  business. 

"Business  is  human  service.  Therefore  business  is  essentially 
a   divine    calling. 

"The  world  can  only  be  redeemed  through  business;  for 
business  means  betterment,  and  no  business  can  now  succeed 
that  does  not  add  to  human  happiness. 

"That  many  wrongs  and  inequalities  exist  in  business  is 
very  true;  but  they  must  and  can  be  righted  without  smashing 


BUSINESS  21 

the  business  fabric.  Just  here  are  required  men  with  great  in- 
sight, patience,  poise,  and  love  of  kind. 

"In  all  of  the  great  cities  are  stores  that  are  radiating  cen- 
ters of  beauty,  education,  and  industry,  where  the  welfare  of 
employes  and  the  public  is  carefully  considered  by  men  of 
power. 

"The  word  "education"  sometimes  stands  for  idleness,  but 
business  always  means  work,  effort,  industry.  It  means  intelli- 
gent, thoughtful,  reasonable,  and  wise  busyness — -helping  your- 
self by  helping  others.  Only  the  busy  person  is  happy. 
Systematic,  daily,  useful  work  is  man's  greatest  blessing." 

Traditional  Conceptions. 

Property  is  held  in  too  sacred  esteem  generally,  and  es- 
pecially in  America,  considering-  the  sentimental  theories  we 
hold.  Law  and  order  are  indeed  to  be  desired  and  are  the 
most  speedy  and  direct  routes  to  justice  and  equity.  "Let 
all  things  be  done  decently  and  in  order,"  but  let  us  never 
cease  to  condemn  property  which  rests  on  injustice  and 
partiality.  Little  title  to  property  rests  on  justice;  let  us 
not,  then,  be  too  squeamish  about  restoring  it  by  legal 
means  to  society. 

It  has  been  discouraging  for  years  to  see  the  decisions 
of  the  courts,  when  questions  have  arisen  between  the  rights 
and  needs  of  the  whole  people  and  the  traditional  claims  of 
aggregated  riches,  given  in  favor  of  these  traditional  claims. 
Is  it  not  sad  to  see  destitution,  suffering  and  helplessness,  to 
see  industry  and  honesty  thrust  aside  to  make  way  for 
greed  and  oppression,  with  no  other  justification  than 
academic  technicality? 

A  stronger  expression  of  this  cannot  be  made  than  to 
quote  Prof.  John  D.  Lawson,  dean  of  the  law  department  of 
the  University  of  Missouri. 

Prof.  Lawson  declared  that  legal  quibbles  had  made  a 
mockery  of  justice  in  the  United  States: 

"If  a  man  is  tried  for  murder  the  indictment  against  him 
must  set  forth,  under  our  laws,  how  the  crime  was  committed, 


22  RIGHT  AND  RICHES 

by  what  means,  the  exact  hour  of  the  day  or  night  and  a  wealth 
of  other  details  that  belong  purely  to  the  trial  of  the  case. 

"Because  some  unimportant  statement  in  the  text  of  that 
charge  is  slightly  inaccurate,  the  entire  case  may  be  reversed 
and  remanded  for  new  trial. 

"Original  justice  is  now  a  contest,  not  a  trial. 

"It  has  developed  into  a  sort  of  game  of  sport,  with  the 
Judge  as  umpire.  What  do  verdicts  amount  to  if  the  criminals 
have  money  to  take  an  appeal? 

"I  know  of  one  case  thrown  out  of  court  because  the  word 
"first"  had  been  spelled  "fust"  in  the  information;  in  another 
the  word  "breast"  was  spelled  without  an  "a,"  and  in  still 
another  the  information  failed  to  state  the  caliber  of  a  revolver. 

"Some  of  these  reasons  for  reversal  were  so  ludicrous  that 
they  read  like  the  efiforts  of  Mark  Twain  or  other  professional 
funny  men. 

"Our  present  methods  were  copied  from  the  statutes  pre- 
vailing under  the  Georges,  the  Stewarts  and  the  Tudors.  They 
were  intended  in  England  to  protect  the  accused  from  the 
tyranny  of  the  courts. 

"What  we  need  is  a  commission  to  investigate  the  laws 
and  their  methods  of  enforcement.  I  believe  this  reform  is 
coming." 

The  erroneous  notions  of  those  without  property  re- 
g-arding  its  awful  sacredness  are  even  worse  than  the  ideas 
of  the  very  rich.  No  one  can  by  any  means  acquire  any  ab- 
solute right  to  the  disposal  of  property.  At  best,  ownership 
is  only  empirical.  The  declaration  of  President  Roosevelt, 
regarding-  the  trumped  up  claims  to  water  needed  to  supply 
one  of  our  cities,  has  the  right  ring.  He  said :  "The  rights 
of  a  great  city  to  a  supply  of  water  transcend  the  supposed 
rights  of  any  corporation." 

That  conception  of  business  is  modifying,  which  re- 
gards it  as  a  game  having  certain  arbitrary  rules  estab- 
lished ;  and  as  being  perfectly  proper,  as  long  as  played  ac- 
cording to  such  rules,  without  regard  to  the  awful  results 
of  the  unlucky.     Such  is  the  popular  political  shibboleth. 

The  average  merchant  seems  to  care  little  how  much  ex- 
cess the  consumer  must  pay,  provided  he  has  as  low  rates 


BUSINESS  23 

as  another  so  that  he  may  compete.  One  bank  wants  all  the 
privileges  another  may  get  and  one  railroad  those  equal 
with  the  rest;  but  the  newer  and  wiser  view  seeks  not 
alone  equality  amongst  those  playing  the  game,  but  the  best 
interest  of  those  outside. 

Business  may  be  interesting  as  a  game.  The  greatest 
skill  may  be  displayed  in  it.  It  is  indeed  the  greatest  of  all 
dramas.  But  this  should  not  be  its  purpose.  Looked  at 
from  the  standpoint  of  the  common  interest  it  is  solely  to 
supply  service  and  comforts  to  humanity — to  serve  human- 
ity. 

Whatever  is  inconsistent  with  this  purpose  is  bad  busi- 
ness. Whoever  is  engaged  in  a  business  which  does  not 
procure  him  profit,  by  contributing  to  the  sum  total  of  hap- 
piness and  service,  should  quit  or  modify  it.  Who  takes 
without  giving  is  a  parasite.  To  paraphrase  the  words  of 
the  great  Teacher :  He  who  would  be  chief  among  business 
men  let  him  give  the  greatest  service. 


CHAPTER  III. 

VaIvUK. 

ALUE  seems  a  very  simple  thing  until  we  begin  to 
examine  it  more  closely.  It  is  primarily  mani- 
fested in  endurance. 

Endurance  is  of  two  kinds ;  the  first  is  nega- 
tive or  passive  and  is  manifested  in  the  discomfort,  or  suf- 
fering incident  to  lack  of  things  or  service.  The  second  is 
positive  or  active  and  is  occasioned  by  the  effort  to  supply 
the  lack.  Hence,  the  discomfort  of  the  labor  which  will  be 
endured  for  anything  indicates  to  some  extent  the  laborer's 
estimate  of  its  value.  But  the  urgency  of  his  lack  may  far 
exceed  the  direst  efiforts  of  his  labor. 

Lack  is  not  only  occasioned  by  inability  to  procure,  but 
by  parting  with  the  needed  thing  for  some  consideration, 
some  other  thing,  or  through  the  consideration  of  love  or 
charity. 

Value,  starting  from  this  basis  of  endurance,  assumes 
three  distinct  phases,  viz. :  Utility,  Exchange  Value  and 
Lack  Value.  Utility  is  that  physical  characteristic  of  a 
thing  which  enables  it  to  satisfy  desire  through  one  or  more 
means.  For  example,  leather  has  utility  for  the  making  of 
shoes,  or  harness,  the  binding  of  books,  upholstering  of  fur- 
niture, the  making  of  parchment,  etc.  Each  of  the  metals 
have  innumerable  uses ;  wood  is  good  to  make  structures, 
for  fuel,  to  make  paper,  and  so  on. 

Utility  is  an  inherent  quality  or  capacity  of  things  to  be 
put  to  use.  The  utility  of  a  thing  is  a  physical  property  of 
it.     It  does  not  depend  on  anyone's  opinion  or  condition. 

These  phases  of  value  may  be  illustrated  by  the  phases 
of  distance.  Individual  lack  compares  with  the  conception 
of  nearness  to  our  person,  home,  or  headquarters.     One 

24 


VALUE  25 

says,  "my  present  employment  is  nearer,"  or  "we  have  the 
church  or  school  near,"  "the  city  is  near,"  "the  store  is 
handy,"  a  place  is  "foreign,"  and  so  on.  In  the  same  sense 
one  says,  "I  need  shoes,  or  bread,  I  need  forty  bushels  of 
lime  or  twenty  yards  of  carpet." 

Utility  compares  with  length,  distance,  irrespective  of 
persons.  We  say,  "The  lake  is  ten  miles  long,"  "the  train 
is  half  a  mile  long,"  "the  railroad  is  three  hundred  miles 
long."  There  is  no  reference  to  the  location  of  either  end 
of  the  distance.  In  the  same  way  in  expressing  utility  we 
say  that  certain  beets  are  so  much  per  cent,  sugar,  or  that  oil 
is  of  a  certain  gravity,  or  coal  will  produce  so  many  units 
of  heat  per  pound,  without  reference  to  who  wishes  sugar 
or  heat. 

Exchange  Value  is  like  the  location  of  a  place  East  or 
West.  San  Francisco  is  not  (considered  alone)  more  West 
than  New  York.  We  cannot  say  "Denver  is  500  miles 
West"  with  any  sense,  without  adding  what  it  is  west  of. 
West  is  solely  comparative.     There  is  no  Natural  West. 

In  practice  we  set  up  a  stake  at  Greenwich  and  arbi- 
trarily create  East  and  West  from  it.  That  is  our  basis  of 
comparison.  Likewise  we  take  some  species  of  property,  as 
tobacco,  or  money,  or  cattle,  or  pelts,  and  create  a  basis  of 
market-value  comparison. 

How  greatly  any  one  desires  a  thing  has  nothing  to  do 
with  its  utility. 

One  phase  of  the  utility  of  a  specific  thing  may  appeal 
to  one  individual,  another  phase  to  another.  One  may  wish 
tobacco  to  chew,  another  to  smoke,  another  to  keep  moths 
away.  One  may  esteem  cows  for  the  utility  of  their  flesh 
for  food ;  another  esteems  them  as  an  object  of  worship. 
The  utility  inherent  in  anything  is  not  therefore  affected  by 
individual  desire,  or  condition. 

Utility  is  but  one  of  the  several  factors  of  lack  and  ex- 
change value.    One  desires  one  thing  for  the  certain  slight 


36  RIGHT  AND  RICHES 

utility  it  possesses  and  finds  there  is  a  certain  degree  of  diffi- 
culty in  getting  it,  while  a  second  thing  is  of  much  more  util- 
ity to  him,  but  of  no  difficulty  of  procurement  whatever.  Yet, 
because  of  the  difficulty  of  procurement,  he  esteems  the  first 
more  than  the  second.  He  will  be  careful  that  it  is  not 
wasted. 

Herein,  then,  we  see  the  second  factor  of  value,  hindrance 
to  procurement.  The  actk'c  factor  of  endurance  here  comes 
into  play.  We  do  not  esteem  the  utility  as  long  as  there  is 
no  lack,  and  there  can  be  lack  onl}-  in  the  degree  in  which 
there  is  hindrance  to  procurement.  Hence,  the  person  will 
do  without,  or  lack  anything,  only  up  to  the  degree  of  diffi- 
culty of  getting.  The  amount  of  toil  or  discomfort  he  will 
endure  will  indicate  how  much  he  lacks  it,  will  indicate  how 
much  he  needs  the  use  of  it,  provided  he  may  be  able  thus  to 
procure  it. 

This  then  to  him  is  its  need-value. 

Articles  have  this  phase  of  value  to  one  person  entirely 
isolated  from  all  other  persons,  as  was  Robinson  Crusoe.  It 
does  not  depend  on  exchange.  When  a  city's  water  supply 
is  low  sometimes  its  use  is  forbidden  for  sprinkling  lawns, 
even  though  paid  for  by  the  gallon,  because  of  the  urgency 
of  its  need  for  household  use. 

The  ability  to  exchange  brings  in  the  other  phase  of  value 
known  as  exchange-value,  often  confused  with  this  individ- 
ual need  or  lack.  Individual  need  relates  solely  to  personal 
experience,  what  we  can  discern  with  the  senses,  just  as  do 
the  measure  of  distances,  expressed  by  the  terms  arm's 
length,  a  day's  journey,  and  so  on.  But  astronomical  dis- 
tances are  not  appreciable  to  the  senses.  They  are  only  ap- 
prehended by  science,  by  mathematics. 

When  a  person  has  need  for  a  horse  and  has  labored  to 
procure  one,  he  mav  exchange  it  for  a  cow  which  he  feels 
a  greater  lack  of.  Hence,  exchanging  originates  from  his 
individual  need.    But  presently  there  evolves  the  procuring 


VALUE  27 

or  making  of  things  of  which  the  individual  has  no  lack  or 
need,  but  procured  solely  for  the  purpose  of  exchanging 
them  for  whatever  else  he  may  lack.  From  this  arises  an 
entirely  new  phase  of  value ;  for  his  estimate  of  value  of 
such  product  has  no  relation  whatever  to  any  utility  in  it  to 
minister  to  his  lack.  He  cannot  measure  this  new  phase  of 
value  with  his  senses,  but  only  by  mathematics. 

It  may  be  tobacco  which  the  individual  is  producing, 
though  he  does  not  use  it  in  any  manner.  He  must  there- 
fore arrive  at  its  value  by  a  process  of  figuring.  He  says  a 
pound  of  tobacco  will  generally  get  me  about  so  much  beef, 
or  so  many  pounds  of  flour,  or  will  get  me  a  coat ;  hence,  he 
labors  to  grow  it,  and  prizes  it  until  he  exchanges  it  for 
what  he  wants.  What  he  will  be  able  to  get  with  it  depends 
somewhat  on  how  much  others  desire  and  lack  tobacco ;  but 
the  producer  knows,  nor  cares  nothing  about  this  lack.  He 
cannot.  What  he  does  learn  is  the  mathematical  comparison 
between  tobacco  and  other  things  in  the  market,  which  is 
their  market  or  exchange  value,  or  ratio. 

Now,  strange  as  it  may  seem,  the  market  value  of  things 
— the  mathematical  comparison  of  their  exchangeableness, 
becomes  more  familiar  to  us  than  their  worth  for  our  per- 
sonal needs,  their  real  worth  to  us.  Desire  for  them,  to  a 
great  extent,  is  measured  by  what  they  will  buy. 

It  is  often  mistakenly  considered  that  the  individual 
lack  or  need  of  things  is  approximately  the  same  as  their 
market  value,  but  there  is  scarcely  any  relation  between 
them.  The  old  proverb  is  more  nearly  true :  "One  man's 
meat  is  another's  posion."  What  one  urgently  seeks  is  trash 
to  another.  Even  what  the  majority  esteem  highly  and 
think  essential  are  useless  to  a  large  minority.  Exchange 
value  is  the  counterfeit  of  real  goodness.  Bread  which  we 
think  so  essential  is  unknown  to  millions  of  people. 


28  RIGHT  AND  RICHES 

You  do  not  commonly  rate  various  commodities  accord- 
ing to  their  relative  capacity  to  satisfy  your  desires,  but  ac- 
cording to  their  market  price.  You  rate  a  house  at  what  it 
will  sell  for,  not  by  its  elegant  design  of  architecture.  You 
compare  silk,  cotton,  linen  and  other  textiles  not  entirely  by 
their  serviceableness,  their  capacity  to  give  the  best  results, 
but  largely  by  their  price. 

Again  a  thing  of  not  very  general  utility  may  serve  your 
purpose  well.  Some  things  of  innumerable  uses  are  very 
cheap  because  plentiful.  Utility  is  not  approximately  com- 
mensurate with  either  our  individual  need  nor  with  the  ex- 
change value  of  things. 

The  exchangeable  value  of  a  thing  nearly  dispenses  with 
the  conception  of  utility.  Exchange-value  is  a  phase  be- 
yond the  comprehension  of  the  senses,  and  dependent  on  the 
intellect ;  for  it  is  not  absolutely  requisite  for  a  thing  of  the 
greatest  exchange  value  to  have  any  utility  whatever- 
Money  need  not,  should  not  have  any  utility,  that  is,  except 
utility  as  money. 

We  may  to-day  go  over  the  market  quotations,  which  are 
simply  the  record  of  exchanges,  and  fix  a  table  of  the  rela- 
tive value  of  a  thousand  commodities  in  Chicago  to-day. 
But  to-morrow  it  will  be  very  different.  We  may  say  X 
bushels  of  wheat  are  worth  Y  bushels  of  oats ;  X  tons  of 
hay  are  worth  O  bushels  of  potatoes,  etc.,  etc.  We  may 
simplify  this  and  say  1  ton  of  hay  is  worth  12  oz.  of  silver, 
1  bushel  of  corn  is  worth  1-3  oz.  of  silver,  100  lbs.  of  hogs 
is  worth  4  oz.  of  silver,  1  lb.  butter  is  worth  ^  oz.  of  silver. 
Here  we  use  silver  in  all  the  comparisons.  This  is  said  to 
be  taking  one  thing  as  a  standard  of  comparison.  This  is  a 
convenience,  for  we  more  readily  comprehend  a  comparison 
with  a  commodity  .we  have  compared  many  other  things 
with.  But  since  exchange  value  is  not  a  quality  of  any  ma- 
terial thing,  but  only  a  temporary  comparison  between  them 
as  indicated  by  the   willingness  of  people  to  exchange  on 


VALUE  29 

such  a  basis,  it  is  then  impossible  that  any  species  of  goods 
can  be  made  a  measure  of  value. 

The  ratios  in  which  things  are  given  in  exchange  has 
little  reference  to  the  labor  consumed  in  their  making; 
neither  any  reference  to  their  use  as  subsistence.  Such  ra- 
tios are  determined  by  the  fancies  of  the  exchangers,  by  un- 
accountable circumstances — the  weather,  accident,  social 
events,  religion,  holidays,  innumerable  causes.  The  law  of 
value  called  the  law  of  supply  and  demand  needs  qualifying. 
Supply  and  demand  are  subject  to  all  the  above  influences. 
But  after  we  have  the  relative  value  of  a  thing,  it  remains 
for  each  of  us  to  translate  it  back  into  our  "lack  value;" 
what  the  foregoing  of  it  would  mean  to  us. 

That  a  pound  of  butter  to-day  is  worth  5  yards  of  mus- 
lin, or  two  pounds  worth  an  axe,  does  not  express  either  their 
utility  nor  yet  an  individual's  relative  need  for  them,  though 
it  is  usually  presumed  to.  Here  is  the  distinction :  Lack- 
value  means  intensity  or  urgency  of  need.  This  urgency  is 
measured  by  the  price  one  will  pay  up  to  a  certain  very  im- 
portant point,  which  is  often  neglected ;  that  is,  up  to  the 
limit  of  the  ability  of  him  who  lacks.  But  the  urgency  does 
not  stop  there. 

What  is  the  lack-value  of  a  bushel  of  grain?  To  one  it 
may  be  a  trifle.  He  slightly  considers  it.  If  the  exchange 
value  be  very  low  he  may  keep  a  few  more  horses  or  if  high 
a  few  less.  It  is  a  slight  matter.  Perhaps  he  does  not  even 
take  cognizance  of  it.  But  to  another  what  an  awful  tragic 
lack-value  has  this  bushel  of  grain.  What  terrible  urgency 
is  expressed  in  its  lack ;  for  though  the  exchange  value  is  low 
he  has  nothing  to  exchange.  He  cries  to  see  his  children 
dying  for  it.  He  has  already  given  all  of  his  meager  wealth 
for  supplies  of  it.  He  has  offered  to  labor,  even  to  die,  to 
get  further  supplies  but  to  no  avail.  Says  Emerson :  "Ah, 
if  the  rich  were  rich  as  the  poor  fancy  riches." 


30  RIGHT  AND  RICHES 

Does  Rockefeller  know  this  value  of  coal  oil?  No! 
Ask  some  poor  mother  who  cannot  furnish  it  that  her  son 
may  have  light  to  pursue  his  studies.  Does  Baer  know  the 
lack-value  of  coal?  Ask  some  father  who  sees  his  child 
dying  from  cold  for  want  of  coal.  Does  Havemeyer  know 
this  individual  value  of  sugar?  Ask  some  poor  country 
folks,  who,  though  the  fruit  is  growing  wild  about  them, 
cannot  get  sugar  to  sweeten  it.  Labor  can  express  the  in- 
tensity of  lack,  only  to  the  extent  that  it  can  supply  it.  The 
price  of  bread  does  not  essentially  increase  in  very  great  ratio 
when  millions  are  starving. 

Exchange  value  is  a  cold,  merciless  quantity  which  takes 
no  thought  of  one's  neighbor.  Exchange  value  calls  for  its 
pound  of  flesh,  not  caring  whether  it  comes  from  the  slaugh- 
ter of  cattle  or  hogs,  or  from  the  slaughter  of  men  and 
women  in  the  sweat  shop,  or  from  the  slaughter  of  helpless 
infancy  in  child  labor.  This  common  method  of  rating- 
values  by  the  dollar  mark,  rating  things  by  what  they  will 
bring  on  the  market  instead  of  what  they  mean  in  comfort, 
health,  happiness,  yes.  even  in  morality,  in  human  life — in 
manhood  and  womanhood — is  the  cause  of  much  wrong. 
Even  in  the  simpler  things  of  life  this  confusion  may  be 
seen  in  persons'  ordinary  shopping.  We  see  them  buying 
things  of  no  use  whatever,  simply  because  the  exchange 
value  or  price  is  high,  and  doing  without  the  cheaper  things 
for  which  they  have  many  times  the  need. 

Women  judge  value  more  from  the  sense  of  negative  en- 
durance, from  having  to  choose  what  they  must  forego, 
and  men  more  from  the  active  effort  they  must  endure  for 
them.  Neither  view  is  perfect  of  itself.  It  is  time  we  all 
paid  more  attention  to  the  real  value  of  things  according  to 
the  enduring  good  they  confer;  according  as  they  tend  to 
the  bettering  of  humanity.  When  we  sit  by  our  blazing 
fires  in  winter  we  should  not  forget  what  an  awful  tempta- 
tion there  is  for  the  poor  destitute  father  to  steal  coal  to 


VALUE  31 

keep  his  family  warm.  What  does  it  signify  that  coal  is 
only  $2.00  per  ton,  if  he  has  no  money  at  all? 

Theorists  have  attempted  to  create  a  measure  of  value. 
There  can  be  no  measure  of  value,  neither  lack  nor  exchange 
value.  Some  have  suggested  labor  as  such  a  measure.  But 
labor  does  not  by  any  means  measure  human  need,  for  the 
reason  above  stated,  that  it  will  not  always  procure  what 
we  lack  on  any  terms.  And  it  does  not  measure  exchange 
value  because  no  two  men's  labor  is  of  the  same  effective- 
ness, or  compensative  purchasing  power,  because  wages 
have  no  relation  to  the  toil  and  suffering  of  labor  to  the  in- 
dividual. You  cannot  make  a  measure  of  value  unless  you 
find  a  commodity  which  will  not  alone  have  always  the  same 
utility,  but  one  which  people  will  always  hold  in  just  a  cer- 
tain esteem. 

Money  is  the  best  attempt  at  such  a  measure,  yet  it  is 
never  the  same  for  two  successive  days.  Exchange  value  is 
but  remotely  dependent  on  Individual  Need  or  Urgency.  It 
is  but  a  ratio,  and  not  even  a  ratio  of  the  comparative 
urgency  of  things,  but  only  a  ratio  between  opinions  as  to 
how  intense  such  urgency  is,  or  will  be. 

A  big  daily  once  had  a  guessing  contest  on  the  attend- 
ance at  a  fair  on  a  certain  day.  Now,  suppose  there  had 
been  another  guessing  contest  on  what  the  average  of  the 
guessers  would  be.  To  estimate  this  average  one  would  not 
only  have  to  take  into  consideration  the  attractiveness  of  the 
fair,  how  it  was  advertised,  etc.,  but  how  those  who  guessed 
would  rate  all  these  prospective  indications. 

Exchange  value  depends  not  only  on  shortness  of  supply, 
on  largeness  of  need,  but  on  innumerable  elements  that  may 
be  expected  to  influence  people's  opinions  of  the  supply  and 
need. 

There  is  no  limit  to  the  quantity  of  a  commodity  sought. 
The  only  thing  that  in  any  sense  fixes  a  certain  quantity  of 
a  commodity  as  a  normal   supply  is,  that  people's  habits 


33  RIGHT  AND  RICHES 

have  become  adapted  to  that  amount.  Therefore  any  de- 
crease from  the  usual  supply  increases  its  price,  and  any 
increase  above  v^hat  has  been  usual  tends  to  cheapen  it,  if 
not  accompanied  by  increase  in  many  other  groups.  A 
commodity  may  be  lov^ered  in  price  by  increase  in  the  supply 
of  others  in  its  group,  though  this  is  not  sure  to  result.  A 
good  supply  of  oil  may  make  coal  of  little  value;  on  the 
contrary,  however,  the  electric  light  has  apparently  in- 
creased the  demand  for  gas,  even  for  illumination,  by  edu- 
cating people  to  bright  lights. 

Overproduction  is  a  favorite  word  of  the  inverted 
school.  There  has  never  been  such  thing  as  overproduction, 
nor  ever  will  be.  There  has  been,  is,  and  there  is  likely  for 
some  time,  to  be  underconsumption.  Thousands,  millions, 
do  not  know  what  plenty  means. 

Exchange  value  is  not  commensurate  with  the  capacity 
of  the  thing,  to  contribute  directly  to  the  comfort  of  its  pos- 
sessor, but  with  its  capacity  to  induce  others  to  contribute  to 
his  comfort. 

Exchange  value  is  negative  to  all  who  seek. 


CHAPTER  IV. 

Prope^rty  Essence. 

"Wealth   in   the  gross   is   death,    but   life   diffused." 

— Pope. 

HAT  is  the  Essence  of  Property? 

Exchange  Value,  for  "Property"  does  not  in- 
dicate the  measure  of  the  innate  serviceableness  of 
things,  their  capacity  to  add  to  the  sum  of  human 
enjoyment,  but  exactly  the  opposite — which  is  the  power  to 
hinder    enjoyment,   to   command   the   labor   and    wealth   of 
others. 

What  constitutes  Value? 

It  arises  from  the  pressure  of  desire  against  hindrance. 
Desirers  seek  and  hinderers  refuse  until  a  compromise  or 
compensation  is  agreed  upon.  This  compensation  is  the 
value  of  the  thing  desired.  The  value  of  property  is  analo- 
gous to  the  pressure  of  steam.  There  is  no  value  to  steam 
for  motive  purposes  without  its  restriction  by  the  confining 
boiler  and  engine.  Its  value  is  measured  by  the  work  it  will 
effect  in  the  engine.  The  value  of  property  is  through  its 
restriction  by  workers,  and  arbitrary  possessors.  This  value 
is  exemplified  in  the  results  it  will  produce  or  buy. 

Again,  value  may  be  illustrated  by  the  electric  light.  The 
hindrance  to  the  electric  current  in  passing  through  the 
filament  produces  heat.  When  the  hindrance  is  of  the  right 
degree  the  heat  is  sufficient  to  produce  light,  but  when  this 
hindrance  becomes  so  great  as  to  interrupt  the  current,  the 
value  in  heat  or  light  ceases.  In  like  manner  the  hindrance 
to  the  current  of  desire  for  land,  resources,  or  goods,  pro- 
duces income  in  the  shape  of  rent,  royalty  or  price,  and  con- 
stitutes a  value  in  the  land,  resource  or  goods.     But  when 

33 


34  RIGHT  AND  RICHES 

this  hindrance  is  made  so  great  as  to  stop  the  use,  it  inter- 
rupts the  value  producing  current.  Thus  cities  are  ruined  by 
booms.  We  see  the  use  of  electricity  for  heating  irons,  for 
cooking  apparatus,  for  several  different  classes  of  lamps, 
which  give  light  through  heat.  Some  use  carbon  filaments, 
others  various  minerals.  The  utility  of  all  these  utensils  de- 
pends on  the  quantity  of  heat.  Now,  it  is  plainly  evident  that 
the  heat  is  not  inherent  in  the  carbon  of  the  filament,  nor  in 
the  wire  of  the  coil  used.  It  inures  from  the  pressure  of  the 
current  against  the  resistance  or  hindrance  imposed.  The 
weight,  bulk,  quantity,  shape  and  consistency  of  these  utilities 
— filaments,  coils,  etc. — have  no  ratio  to  the  heat  output.  A 
carload  of  carbon  filaments  would  not  produce  a  spark  of 
light  when  not  being  acted  upon  by  the  current  with  the  proper 
degree  of  hindrance.  Just  so,  wood,  iron,  cloth,  glass,  china, 
any  species  of  goods  has  no  value  of  itself  except  as  acted 
upon  by  the  "current"  desire  and  the  resistance  of  owners 
through  hindrance  to  use.  Value  is  not  IN  things.  Value  ex- 
ists and  continues  in  thought — in  the  current  opinion  or  es- 
timate of  the  desire  for,  and  hindrance  to  having  things. 
The  things  are  only  the  medium  through  which  the  current 
of  satisfaction  flows  to  desire. 

Desire  varies  as  does  the  electric  current  in  the  filament. 
It  may  be  artificially  increased  or  diminished  within  certain 
limits.  Intelligent  education  or  advertising  increases  the 
intensity  of  desire.  Hindrance  to  having  things  is  also  var- 
iable. 

Strictly  speaking  "things"  do  not  constitute  property. 
Value  constitutes  property.  If  things  are  the  medium  of 
satisfaction,  to  desire,  with  a  reasonable  restriction  to  their 
use  there  arises  an  opinion  relating  to  such  things,  a  vari- 
able estimate  of  their  utility  and  availability,  which  con- 
stitutes value ;  a  value,  not  IN  them,  but  relating  to  them. 

Hence,  the  law  of  value  is:  Whatever  increases  desire 
for  certain  articles  tends  to  increase  their  value.     Whatever 


PROPERTY   ESSENCE  35 

tends  to  induce  or  enable  owners  or  makers  to  increase  hin- 
drance, tends  to  increase  value,  provided  it  does  not  in- 
crease to  such  an  excess  as  to  divert  the  current  of  desire — 
that  is,  to  cause  some  substitute  to  be  provided  for  satis- 
faction. 

People  wish  light.  Not  particularly  that  made  by  elec- 
tricity or  oil,  but  just  light.  Perhaps  they  prefer  the  cost- 
less daylight.  But  this  is  not  at  all  times  and  places  available. 
Hence  whatever  furnishes  the  medium  or  means  of  good 
light  is  sought.  The  desire  for  light  has  a  relation  to  such 
apparatus.  But  some  one  asks,  has  not  the  fine  machine, 
built  so  beautifully  and  strongly  of  good  steel,  a  permanent 
value?  Not  in  itself.  Perhaps  what  it  is  made  to  produce 
will  become  obsolete  in  a  few  months.  Perhaps  a  machine 
so  much  superior  will  be  built  that  it  will  be  only  so  much 
scrap. 

Strictly  speaking,  desire  seeks  not  things  but  satisfac- 
tion. People  desire  to  be  transported.  Not  essentially  by 
railroad.  They  desire  goods  moved ;  whether  by  boat,  car, 
wagon,  auto-truck,  or  airship,  they  care  not.  Cars,  ships, 
trucks,  etc.,  are  of  value  in  the  degree  that  they  satisfy  this 
desire  and  coupled  with  the  degree  of  their  owners'  restrict- 
ive control.  So  with  everything  sought.  The  pressure  of 
seekers,  against  the  withholding  of  the  holders,  gives  things 
value,  makes  property  of  them.  Holders  of  property  are 
impelled  to  base  their  price  somewhat  on  what  it  would  cost 
them  to  replace  it ;  hence,  the  wages,  rent,  interest,  all  the 
charges  of  producing  or  procuring  new  supplies,  enter  into 
the  reckoning  of  prices.  Plainly,  goods  cannot  continuously 
be  sold  at  less  than  cost.  Hence,  loosely  speaking,  they  are 
usually  worth  what  they  cost. 

Whatever  is  an  obstacle  to  procuring  supplies,  whether 
natural  or  purely  arbitrary,  tends  to  maintain  the  price  of 
such  supplies.  Suppose  one  has  a  ranch  where  he  may  pro- 
cure water  by  pumping  from  a  depth,  or  by  buying  from 


36  RIGHT  AND  RICHES 

some  one  who  controls  a  flowing  stream  which  needs  no 
pumping;  will  not  his  cost  for  such  water  be  whichever  is 
cheaper  ?  The  price  of  fuel  depends  at  certain  places  on  the 
arbitrary  charges  made  by  owners  for  oil  flowing  sponta- 
neously from  the  earth,  or  on  the  railroads'  price  for  coal,  or 
the  work  of  cutting  wood.  Arbitrary  hindrance  as  much 
maintains  prices  as  workers'  wages. 

Value  as  thus  maintained  is  termed  exchange  value.  It  is 
a  value  as  between  dift'erent  individuals.  Between  present 
owners  and  those  who  desire  to  procure. 

Value,  commercial  value,  exchange  value,  property  value, 
individualistic  value,  is  quite  distinct  from  utility  or  use- 
fulness. In  arid  regions,  water  for  growing  crops  is  fur- 
nished by  ditches  from  reservoirs  or  streams,  or  by  pumps. 
Such  water  is  property.  It  has  exchange  value.  Owners 
of  ditches  derive  immense  incomes  therefrom.  The  crops, 
and  therefore  the  wealth  production  of  the  communities, 
depend  on  this  water  property.  But  in  other  districts  water 
for  growing  crops  comes  from  the  clouds  in  rainfall.  It 
serves  the  same  purpose.  On  it  depends  the  wealth  pro- 
duction of  such  district.  Yet  rain  is  not  property.  It  has 
not  exchange  or  commercial  value.  It  is  not  counted  part 
of  the  wealth  of  the  district.  Why  ?  Because  it  is  not  sub- 
ject to  control,  to  purchase  and  sale;  it  is  not  "proper"  to 
an  individual  owner. 

Hence,  we  may  see  that  the  amount  of  value  of  property 
in  a  community  does  not  measure  the  comfort  or  means  of 
satisfaction  in  such  community.  The  canopies  over  the 
beds  in  Louisiana  to  save  sleepers  from  being  devoured  by 
mosquitos  are  property.  But  the  people  of  another  place 
where  mosquitos  are  absent  are  not  poorer  for  lack  of  such 
property.  People  of  milder  climates  are  not  poorer  for 
lack  of  triple  windows,  immense  stores  of  winter  coal, 
heavy  brick  walls,  weighty  furs  and  clothing  required  in 
the  rigorous  climate. 


PROPERTY   ESSENCE  37 

Now,  the  important  idea  here  sought  to  be  impressed 
is  that  value  in  property  is  not  beneficial  to  humanity  col- 
lectively. Usefulness  is  what  blesses  us  collectively.  Ex- 
change value  but  represents  the  power  embraced  in  the 
ownership  of  an  article  of  property  to  command  wealth  or 
service.  "Let  in  the  new  and  renewing  principle  of  love, 
and  property  will  be  universality,"  says  Emerson. 

Exchange  value  is  beneficial  solely  to  owners.  The  heat 
of  the  Mississippi  Valley  causes  electric  fans  and  ice  boxes 
to  be  almost  a  necessity,  while  in  San  Francisco  they  are 
almost  superfluous.  The  demand  for  current  in  the  "Val- 
ley" adds  to  the  value  of  electric  property.  These  demands 
enable  electric  and  ice  companies  to  collect  large  revenue 
from  the  people.  But  is  San  Francisco  poorer  by  reason 
of  being  almost  without  fans  and  ice?  In  one  city,  by 
reason  of  frequent  storms  or  earthquakes,  buildings  must 
be  built  of  great  endurance,  while  in  another  where  there 
are  no  storms  nor  freezing,  they  are  of  light  and  cheap  con- 
struction. Is  the  first  city  richer  for  its  more  costly  build- 
ings? In  one  city  rents  are  low  and  lots  correspondingly 
low.  The  real  estate  may  not  have  but  half  the  selling 
value  that  it  would  if  rents  were  as  high  as  in  another  city. 
But  is  the  city  poorer  therefor  ?  Only  the  utility  of  property 
aggregates  to  the  community  collectively. 

Value  is  positive  to  him  who  wishes  to  sell,  but  negative 
to  him  who  must  buy.  High  prices  for  potatoes  benefit 
growers  but  impoverish  eaters.  But  plentifulness  in  utility 
blesses  all. 

The  arbitrary  restriction  of  supply  by  those  who,  by 
any  means,  control  supply,  establishes  value;  determines  the 
"propertyness"  of  a  thing,  as  much  as  the  difficulties  of 
growing,  mining  or  fabrication. 

Hence,  the  rent  of  land  combines  with  the  wages  of 
labor,  and  the  INTEREST  of  capital,  to  give  value  to  output. 

Pi  -f  ^^,' 


38  RIGHT  AND  RICHES 

But  only  the  productive  factors,  labor  and  capital,  give  util- 
ity, add  comfort  and  satisfaction. 

Trusts  greatly  enhance  the  aggregate  z'ahie  of  the  prop- 
erty they  control,  while  perhaps  lessening  the  actual  supply 
of  utilities. 

We  have  no  measure  of  utilities  in  an  aggregate.  In 
some  lines  there  is  some  sort  of  an  attempt  in  this  direction. 
We  speak  of  so  many  candle  power  of  light,  so  many  rooms 
in  a  house,  so  many  seats  in  a  theater.  But  to  aggregate 
we  must  say  so  many  dollars'  worth  of  food,  buildings  or 
what  not.  The  new  buildings  built  in  a  city  in  the  last  year 
may  be  rated  at  a  million  dollars  and  yet  be  less  in  number 
and  utility  than  those  of  ten  years  ago,  which  cost  but  half 
a  million. 

This  lack  of  words  or  even  definite  ideas  to  comprehend 
the  utility  phase  of  things  is  one  thing  which  make  econom- 
ics so  difficult  to  grasp.  With  the  present  status  of  thought 
the  quantity  and  importance  of  property  must  be  rated  by 
its  exchange  value. 


CHAPTER  V. 

Property  Evolution. 

HERE   is   a   kind   of   property    that   is   permanent, 

fixed,  whose  use  does  not  injure  or  diminish   it. 

Areas   of  the   surface  of  the  earth   as   sites    for 

homes  and  other  uses  are  fixed  property ;  use  does 

not  injure  this  class  of  property.     The  site  occupied  by  a 

home  thousands  of  years   ago  still  exists.     It  requires  no 

renewal. 

There  is  another  class  of  property  which  is  consumed 
with  use,  which  depends  for  its  existence  on  constant  RE- 
NEWAL either  by -NATURE  or  MAN.  This  is  Wealth. 
Food,  clothing-,  shelter,  art,  means  of  transportation,  fuel, 
etc.,  are  wealth.  Wealth  does  not  depend  solely  on  labor. 
It  is  supplied  also  from  spontaneous  natural  growths ;  as 
grass,  stock,  fruit,  etc.,  accruing  to  land  owners.  Wealth 
does  not  endure  long.  Some  a  day,  some  a  week,  month, 
year  or  even  a  generation,  as  milk,  ice,  meat,  cloth,  wood, 
iron. 

One  may  procure  a  piece  of  FIXED  PROPERTY,  hold 
it  without  efl^ort  during  his  life  and  bequeath  it  to  his  suc- 
cessors. But  it  is  necessary  for  us  all  to  be  continually  ac- 
quiring a  renewal  of  our  supply  of  wealth. 

Under  primitive  conditions  man  procures  this  renewal 
by  adapting  the  wild  unlimited  growths  and  deposits  of  ma- 
terials to  his  use.  He  kills  game,  to  secure  food  and  skins 
from  which  to  make  clothing  and  shelter.  He  catches  fish 
from  the  boundless  waters.  He  cuts  trees  from  the  limitless 
forest.  He  kills  the  bear  or  buffalo  from  the  herds,  so 
numerous  and  plentiful  that  he  thinks  it  not  waste  to  take 
the  hide  and  leave  the  carcass.  But  even  so  he  finds  some 
things  only  available  at  certain  seasons.     Fruits,  nuts,  etc., 

3-  39 


40  RIGHT  AND  RICHES 

must  be  gathered  and  stored  in  season.  Fish  are  more 
plentiful  at  certain  seasons.  He  must  gather  in  stores  or 
stocks  of  such  things  until  the  next  season.  He  does  not 
find  all  the  things  he  requires  at  one  location.  He  must 
bring  some  of  his  supplies  from  a  distance.  To  do  this  he 
needs  means  of  transportation,  boats,  wagons,  etc.  He 
may  find  it  even  more  convenient  to  cultivate  crops  or  do- 
mesticate animals.  This  requires  fences,  barns,  implements. 
For  his  stores  he  needs  warehouses.  All  the  stores,  ware- 
houses, fences,  barns,  boats,  wagons,  implements  are  useful 
in  making  his  work  effective.    They  are  his  Capital. 

To  have  capital  he  must  put  by  what  he  should  like  to 
use  in  enjoyment  at  once,  or  must  devote  his  time  to  pro- 
curing wealth  for  capital  instead  of  procuring  something  to 
enjoy  at  once.  But  he  soon  learns  that  by  this  abstention, 
this  working  for  and  applying  wealth  for  a  future  use,  he 
may  have  much  larger  supplies  and  with  less  labor.  As 
men  become  more  civilized  and  educated  in  science  and  in 
neighborliness,   the  tendency  to  create  capital   is   stronger. 

But  all  wares  must  be  made  from  natural  supplies  of 
material.  Production  advances  but  little,  until  the  producer 
finds  that  "knowing  persons"  have  anticipated  his  need  of 
raw  materials  and  have  seized  upon  all  lands  which  contain 
them.  As  he  advances  further,  he  finds  the  avenues  which 
lead  to  markets  barred  by  toll  gates.  These  persons,  like  the 
Moor  bands,  now  being  suppressed,  demand  a  large  share  of 
his  output  for  this  access. 

We  see  that  output  is  shared  between  the  producers  for 
their  labor  and  capital,  and  those  who  have  the  power  to 
hinder  the  use  of  natural  opportunities.  This  hindering 
power  embraces  the  ownership  of  land,  mines,  franchises, 
and  trade  monopolies.  Their  owners  gain  possession  of 
them  either  by  violence  or  graft,  or  by  taking  them  before 
society's  needs  have  grown  to  require  them.  Society, 
through  the  ignorance,  fear  and  greed  of  its  members,  for- 


PROPERTY  EVOLUTION  41 

bears  to  disturb  them  and  confirms  their  title  thereto  by 
laws  of  cession  or  grant.  Hence,  we  may  term  all  such 
property,  as  consists  of  control  of  natural  or  social  oppor- 
tunities, CONCESSION. 

Property  consists  not  in  physical  volumes  or  areas,  but 
in  authority.  Property  evolves  from  and  consists  in  the  con- 
trol of  others  desires,  through  the  command  of  the  physical 
or  functional  entities  on  which  their  satisfaction  depends. 
Hence  the  power  to  permit  or  hinder  use  constitutes  prop- 
erty. 


CHAPTER  VI. 

Property  Precepts. 

HE   following   facts   about   property   are  important 
to  remember : 

1.     That  property  evolves  in  a  thing  from  the 
first  recognition  of  authority  to  hinder  its  use. 

2.  That  laws  of  property  are  dictated  principally  by 
and  for  the  advantage  of  the  owners  of  property. 

3.  That  the  existing  basis  of  ownership  is  not  even 
approximately  founded  on  right. 

4.  That  government  was  forever  instituted  and  founded 
on  the  theory  of  the  superior  rights  of  the  fortunate,  but 
even  so,  that  order  with  injustice  is  better  than  anarchy, 
and  that  rapid  strides  are  being  made  toward  improvement. 

5.  That  decrees  or  grants  of  title  by  one  generation  is 
not  an  obligation  that  the  succeeding  generation  is  morally 
bound  to  respect  in  making  their  laws. 

6.  That  one's  claim  to  the  reasonable  requisites  of  life 
is  not  dependent  on  his  labor. 

7.  That  each  has  a  right  to  an  equal  supply  for  person- 
al needs,  irrespective  of  his  productive  or  acquisitive  ca- 
pacity; but  that  each  person's  obligations  to  society  are  in 
proportion  to  his  natural  or  acquired  capacities. 

8.  That  the  right  to  control  the  means  of  production 
is  in  some  measure  justified  by  their  successful  use  for  the 
good  of  society. 

9.  That  the  opulent  have  no  meaner  idea  of  the  rights 
of  the  poor  than  the  poor  have  of  their  own  rights,  and 
oppression  is  supported  by  the  false  ideas  of  the  oppressed. 

10.  That  the  intensity  of  lack  is  in  no  degree  measured 
by  Exchange-value. 

42 


PROPERTY  PRECEPTS  43 

11.  The  relative  Exchange- value  of  things  is  not  like- 
ly to  be  their  relative  worth  to  any  one  person. 

12.  The  Exchange-value  of  a  thing  depends  not  on  its 
utility  to  one,  but  what  it  will  procure  him  from  others. 

13.  Value  is  not  in  things,  but  in  the  prevailing  opin- 
ion of  them. 

14.  Desire  is  not  for  things,  but  satisfaction. 

15.  The  value  of  a  thing  is  the  compromise  between 
desire  and  hindrance. 

16.  Increase  of  exchange-value  in  a  commodity    is  as 
much  loss  to  the  users  as  it  is  gain  to  the  holders. 

17.  That   property,   under  the  present   status,   consists 
less  in  the  ability  to  use  than  in  the  power  to  hinder  use. 


PART  THREE. 


Production. 


Chapter    I.  What  Production  Comprehends. 

"         II.  Exchange  and  Art. 

"       III.  Labor  and  Wages. 

IV.  Wealth. 

"         V.  Capital,  Increase  and  Interest. 


CHAPTER  I. 

What  Production  Comprehends. 

O  study  the  condition  of  output  or  the  replenishing 
of  the  stock  of  wealth,  we  must  define  a  very  con- 
fusing though  common  term  of  economics — Pro- 
duction. The  principal  confusion  of  economic 
thought  arises  from  a  double  meaning  attached  to  this  term. 
When  a  Robinson  Crusoe  lands  on  a  fertile  island  he  finds 
there  the  sources  of  abundant  supply  of  subsistence,  but  little 
of  it  is  in  condition  for  his  use.  Trees  must  be  cut  for  fuel, 
and  shaped  and  built  up  for  shelter.  Food  must  be  gathered 
or  provided  by  killing  animals.  This  takes  effort  on  his 
part,  or  labor.  To  provide  a  satisfactory  supply  he  must 
plant  and  cultivate  crops.  The  supply  which  he  has  thus 
adapted,  or  even  which  is  partly  completed  for  use,  by  his 
labor,  he  prizes  and  protects  from  waste.  It  is  valuable.  He 
has  caused  it  to  have  a  special  utility  for  his  enjoyment  above 
all  the  wild  growth  of  the  island.  He  has  "produced"  it 
with  his  labor.  Here  is  production  in  its  true  economic 
meaning. 

Production,  therefore,  comprises  all  effects  of  human 
agency,  directed  toward  service  and  increase,  or  replenish- 
ing of  supplies  for  the  satisfaction  of  desire. 

Service  is  that  part  of  production  which  does  not  result 
in  a  tangible  output  but  is  applied  directly  to  satisfaction. 
Teaching,  nursing,  domestic  service,  etc.,  are  examples  of 
service  resulting  from  labor.  Hotels,  means  of  transporta- 
tion for  passengers,  theatrical  and  other  amusements,  are 
examples  of  service  resulting  from  labor  and  capital.  Service 
has  the  general  nature  and  is  produced  by  the  same  methods 
as  is  tangible  output. 

47 


48  RIGHT  AND  RICHES 

Many  writers  confuse  natural  forces  with  human  agency 
in  treating  of  production.  To  be  sure,  human  agency  can  do 
nothing  without  natural  forces ;  but  the  use  of  such  forces 
do  not  for  that  reason  constitute  them  factors  of  production. 
To  illustrate,  let  us  take  the  term  heat.  Heat  is  a  certain 
phenomenon  observed  in  its  effects  on  the  human  body  and 
on  other  material  elements.  Now  heat  may  be  produced  by 
the  use  of  coai,  or  wood,  or  gas,  or  electricity,  or  friction. 
There  is  animal  heat  and  sun  heat  and  chemical  heat.  Yet 
we  do  not  confuse  heat  with  fuel,  or  chemical  action.  Heat 
is  a  distinct  phenomenon.  It  is  a  powerful  and  useful  agency 
for  many  purposes.  We  care  not  whether  it  results  from 
fuel,  electricity,  or  sunlight. 

Human  agency  must  use  a  multitude  of  natural  mate- 
rials and  forces,  but  we  must  maintain  our  idea  of  human 
agency  unconfused  as  the  sole  factor  of  production.  Soil, 
sun,  mineral  deposits,  and  such  things  are  not  factors  of 
production.  It  is  the  effect  produced  on  or  with  them  that 
constitutes  production.  These  forces  act  freely,  hence  do  not 
induce  nalue,  the  essence  of  wealth.  The  profusion  of  their 
output  is  not  wealth  unless  humanly  circumscribed. 

Webster  defines  produce :  "To  lead  forward,"  "to  cause 
to  exist ;"  he  also  gives  many  other  definitions,  but  in  the 
economic  sense  it  must  be  restricted.  We  must  limit  it  to 
what  human  agency  causes ;  to  the  leading  forward ;  the 
making  available  by  human  initiative,  by  human  effort.  The 
other  common  meaning  of  produce,  "to  yield,"  referring  to 
growths  or  results  of  natural  causes,  must  be  eliminated 
from  the  economic  meaning.  Human  agency  plants,  culti- 
vates and  gathers  crops ;  it  mines  and  quarries  useful  min- 
erals ;  it  shapes,  modifies  and  transports.  This  is  production. 
Output  of  wealth  is  from  both  human  and  natural  forces,  but 
its  production  comprises  only  the  human  contribution. 


CHAPTER  11. 

Exchange  and  Art. 

HIS  human  agency  is  of  two  distinct  natures,  the 

active  and  the  passive.    The  active  agency  is  called 

Labor,  the  passive,  Capital.    Labor  actively  moves, 

directs  and  accomplishes.     Humanity  passively  al- 

lozvs  its  wealth  to  aid  this  active  element.    Produce  does  not 

mean  simply  to  grow  or  manufacture,  but  to  make  available 

in  any  way.     Exchange  is  an  effective  means  of  production. 

Exchange  is  often  treated  by  economists  as  an  evolution. 
Exchange  is  not  an  evolution,  it  is  a  revolution,  an  innova- 
tion. The  wildest  savage  may  incidentally  trade  his  bow, 
or  boat,  or  gun,  to  another  for  some  other  thing.  He  may 
see  what  an  advantage  this  is  and  seek  other  trades.  These 
are  incidents. 

But  when  a  community  has  advanced  to  a  state  of  in- 
telligence such  as  to  allow  one  or  more  of  its  citizens  to  de- 
vote his  attention  solely  to  the  production  of  one  kind  of 
commodity,  a  distinctly  new  era  has  opened  up.  Presto! 
there  is  born  exchange-value;  for  exchange  value  is  not, 
as  many  mistakenly  think,  simply  that  comparison  of  es- 
teem which  an  Indian  might  entertain  regarding  a  fine  fur, 
a  pony,  or  a  boat,  as  a  means  contributing  to  his  pleasure. 
Nothing  of  the  kind.  It  is  more  nearly  like  the  esteem  of  the 
gaudy  beads  which  an  educated  and  refined  explorer  might 
carry  into  the  wilderness  to  exchange  to  the  Savages,  as 
Stanley  did — of  no  earthly  attraction,  or  worth  to  their 
owner  except  to  trade  for  what  he  may  desire.  He  esteems 
them  only  for  what  they  will  buy. 

Thus  one  engages  in  production  of  one  commodity 
alone,  that  commodity  being  rated  by  him  as  though  he  had 

49 


50  RIGHT  AND  RICHES 

no  personal  use  for  it  whatever,  but  as  the  wampum  or 
beads,  which  one  reckons  some  other  one  will  wish,  and  for 
which  they  will  furnish  his  needs  for  other  things.  Ex- 
change starts  very  early  in  civilization :  "Abel  was  a  keeper 
of  sheep,  but  Cain  was  a  tiller  of  the  ground." 

While  division  of  labor  is  foreign  to  that  desolate  state 
where  one  would  try  to  supply  all  his  own  wants,  it  is,  nev- 
ertheless, the  natural  inspiration  of  man's  efforts ;  but  greed 
is  not  its  natural  stimulus.  Nor  may  we  trust  greed  to  di- 
rect the  output  and  supply  of  wealth.  True,  production  rests 
on  the  artistic  instinct  of  man,  which  rises  and  expands  with 
his  moral  and  intellectual  development — with  his  re-approach 
to  his  native  condition  of  brotherhood,  for  what  is  the  motive 
of  true  art  but  the  desire  to  bless  others  by  contributing 
what  will  give  comfort  and  happiness. 

"Bear  ye  one  another's  burdens  and  so  fulfil  the  law 
of  Christ.  But  let  every  man  prove  his  own  work  and 
then  shall  he  have  rejoicing  in  himself  alone  and  not  in 
another." — Gal.  6:2,4. 

Someone  has  tritely  said :  "Love  is  the  art  of  hearts  and 
the  heart  of  arts."  Is  it  not  well  recognized  that  no  noble 
art  is  produced  in  response  to  a  pecuniary  reward?  Every 
normal  person  has  the  instinct  of  art  in  some  line,  if  he 
has  not  smothered  it;  that  is,  of  art  in  its  broad  sense  of 
creating  things  or  service  of  use  and  beauty.  To  use  Em- 
erson's words:  "As  soon  as  beauty  is  sought,  not  from  re- 
ligion and  love,  but  for  pleasure,  it  degrades  the  seeker. 
Beauty  must  come  back  to  the  useful  arts,  and  the  distinction 
between  the  fine  and  the  useful  arts  be  forgotten.  It  is  vain 
that  we  look  for  genius  to  reiterate  its  miracles  in  the  old 
arts ;  it  is  its  instinct  to  find  beauty  and  holiness  in  new  and 
necessary  facts  in  the  field  and  roadside,  in  the  shop  and 
mill.  Proceeding  fiom  a  religious  heart  it  will  raise 
to  a  divine  use.  the  railroad,  the  insurance  office,  the  joint 
stock  company,  our  law,  our  primary  assemblies,  our  com- 
merce." 


EXCHANGE  AND  ART  51 

But  Art,  starting-  from  such  sublime  source,  may  like 
plant  life  be  dwarfed  or  distorted.  The  tree  repressed  and 
stunted  becomes  knarled  and  knotty.  So  art  is  distorted  by 
the  unnatural  environment  of  the  artist,  into  morbid  phases 
and  freakish  imitation  of  ancient  degeneracy  and  ignorance, 
and  such  phase  is  often  held  up  as  a  standard.  Wholesome 
art  is  the  outward  expression  of  the  inner  life  of  the  com- 
munity contemporary  with  the  artist.  Such  art  is  mani- 
fested in  all  the  wares  and  commodities  of  a  people.  And 
as  the  choicest  wood,  marble,  gems  and  gold  are  put  to  base 
uses,  so  art  is  put  to  uses  which  tend  to  debase  rather  than 
to  uplift  mankind. 

A  nation  may  be  pretty  well  judged  by  its  use  of  the  more 
genteel  arts.  The  most  extravagant  art  of  India  and  some 
other  lands  is  lavished  on  tombs,  as  if  to  emphasize  the  fact 
that  there  civilization  itself  is  dead.  America  has  most  of 
her  art  in  the  home.    Art  here  is  for  the  living. 

Art  is  for  man  and  not  man  for  art.  Art  should  be  used, 
but  not  worshiped.  "Thou  shalt  not  make  unto  thee  any 
graven  image,  thou  shalt  not  bow  down  to  them  or  serve 
them."  The  depraving  results  of  worshiping  churches  in- 
stead of  worshiping  in  churches ;  worshiping  works  of  art, 
instead  of  worshiping  by  works  of  art,  is  sadly  shown  by 
the  populace  of  old  centers  of  art.  The  tendency  of  wor- 
shiping their  art  by  the  devotees  of  sculpture,  painting, 
music  and  other  arts  which  assume  the  title  of  "fine  arts," 
has  distressing  effect  on  such  worshipers.  The  loose  mor- 
als of  persons  who  go  to  excess  in  their  adoration  is  pro- 
verbial. The  song  or  picture  of  the  most  exquisite  technique 
is  not  always  the  most  inspiring,  enjoyable  or  elevating. 

There  is  but  one  reason  why  the  makers  of  the  finest 
statuary  or  paintings,  or  the  writers,  or  interpreters  of 
beautiful  music,  should  become  egotistical  about  their  art 
more  than  the  workers  on  a  fine  auto,  cottage  or  boat.  This 
one   reason   is  because  their   work   is  more   individualistic. 


52  RIGHT  AND  RICHES 

One  man  makes  a  painting  alone,  or  sings  a  song  alone. 
Many  must  co-operate  in  the  auto  or  boat. 

The  art  which  blesses  mankind  is  inspired  by  love.  But 
all  output  of  physical  commodities  does  not  emanate  from 
this  divine  impulse.    Therein  is  one  cause  of  our  troubles. 

Exchange,  commerce,  is  necessary  to  give  scope  to  the 
artistic  instinct  and  talent.  A  hermit,  isolated  from  society, 
cannot  have  either  inclination  or  opportunity  to  create  much 
of  beauty.  The  artistic  instinct  is  a  part  of  man's  spiritual 
nature.     Its  desire  is  to  give ;  greed  seeks  to  take. 

Greed  and  selfishness  repress  art.  The  artist  seeks  not 
to  promote  his  own  ease  or  satisfaction,  but  that  of  others. 
The  knowledge  that  he  does  so  is  his  greatest  reward.  Yet 
this  does  not  lessen  the  pecuniary  reward  due  him,  which  is 
the  supplying  of  his  needs  as  a  compensation.  However  little 
appreciated,  this  noble  motive  is  the  main  stimulus  of  com- 
merce. Because  of  greed,  producers  dare  not  be  completely 
disinterested.  That  business  is  on  a  mean  and  sordid  basis 
whose  main  motive  is  not  the  good  of  those  it  supplies.  It 
may  seem  that  great  success  is  sometimes  achieved  by  con- 
cerns whose  only  object  is  gain,  but  it  cannot  be  denied  that 
success  is  surer  and  more  common,  from  the  high  purpose 
to  give  the  greatest  possible  good  to  patrons. 

The  next  step  after  some  have  engaged  to  produce  but 
one  line,  and  to  depend  on  exchange  for  their  own  requisites, 
is  the  engaging  by  some  solely  in  the  occupation  of  promot- 
ing exchanges,  and  ceasing  all  efforts  at  growing  or  fabri- 
cating commodities.  Such  persons  fill  a  necessary  place  in 
the  developm.ent  of  industry.  To  be  adapted  to  such  a 
sphere,  which  most  persons  are  not,  one  should  have  a  ca- 
pacity to  judge  the  commodities  he  handles  and  to  interpret 
the  desires  of  the  people,  so  that  he  may  help  to  direct  pro- 
ducers how  to  furnish  an  output  which  will  satisfy  people's 
desires. 


EXCHANGE  AND  ART  53 

Exchange  is  a  vital  part  of  production,  for  shoes  on  the 
retailers'  shelves  are,  from  an  economic  view,  not  completed 
except  in  a  degree,  any  more  than  when  they  are  simply 
leather,  thread,  etc.  They  must  be  fitted  to  feet  and  sold,  to 
be  completed.  Output  may  be  roughly  separated  into 
groups,  each  of  which  is  intended  to  satisfy  a  certain  desire, 
as  grains,  potatoes,  fruit,  etc.,  for  food;  lumber,  stone,  lime, 
etc.,  for  building.  Each  person  seeks  to  satisfy  his  desire 
for  food,  clothing,  ornament,  music,  etc.,  by  offering  some- 
thing of  another  group  in  exchange  for  it.  This  exchange 
is  accomplished  by  first  exchanging  for  the  symbol  of  wealth, 
money,  and  then  changing  the  money  for  what  we  desire. 

An  article  is  actually  of  more  value  to  the  buyer  than  to 
the  seller.  This  is  the  legitimate  profit  of  the  merchant.  He 
must  keep  a  stock  subject  to  loss  by  fire,  change  of  style,  etc., 
must  pay  rent,  and  many  other  expenses,  in  order  to  allot 
a  pair  of  shoes  to  each  wearer  that  will  suit  him  in  price, 
style  and  comfort. 

Many  seem  unable  to  distinguish  any  radical  difference 
between  gambling  and  business  risks.  Business  risks  are  a 
necessity.  Some  one  must  carry  them,  and  the  premium 
which  the  consumer  pays  for  goods,  reimburses  merchants 
for  their  losses.  But  gambling  is  an  artificial  risk,  created 
for  no  final  good  purpose,  but  only  to  catch  those  who  wish 
to  get  money  without  giving  a  return.  Much  that  is  called 
speculation  is  only  gambling.  Gambling  is  a  total  loss  to  the 
community  in  wasted  time,  energy  and  manhood.  It  is  com- 
mon to  be  charitable  to  many  useless  and  harmful  lines  of 
exchange  or  business,  and  class  it  with  respectable  industry; 
but  no  business  deserves  such  respect  that  does  not  actually 
contribute  to  the  final  supplying  of  comfort  and  happiness. 
The  risks  and  losses  incurred  in  honest  trade  are  but  part 
of  the  total  cost  to  consumers.  It  is  desirable,  of  course,  to 
keep  them  down  to  a  minimum.     Risks  created  for  no  real 


54  RIGHT  AND  RICHES 

purpose  but  to  gamble  on  should  be  stopped  by  law,  and 
happily  such  practice  is  becoming  more  general. 

Goods  of  different  groups  may  be  procured  from  the  same 
locality  or  from  widely  distant  lands.  The  greater  portion, 
however,  arise  right  in  the  same  locality.  The  production 
of  salt  goes  on  in  the  same  field  with  grain,  glass,  fish, 
leather,  gold,  copper,  etc.  True,  where  coffee  grows,  little 
corn  is  raised,  and  to  some  great  gold  mines  water  must  be 
brought  four  hundred  miles  up  an  elevation  of  two  thousand 
feet.  Yet  some  points,  by  common  consent,  become  pro- 
ducers in  certain  lines.  One  place  monopolizes  the  brass 
button  and  buckle  business,  another  makes  beer,  another 
automobiles.  Sometimes  this  is  because  the  skill  developed 
in  some  pioneer  plant  clusters  about  it  in  other  works.  But 
whether  from  near  or  far,  the  production  in  one  group  is 
paid  for  from  the  product  of  many  others.  The  motive  of  all 
true  production  is  the  good  of  the  consumer,  to  better  serve 
and  satisfy  mankind.  This  motive  in  a  considerable  measure, 
however,  is  frustrated,  as  I  shall  endeavor  to  show. 

Government  should  encourage  the  production  of  such 
things  as  are  for  the  best  interests  of  consumers.  The  mak- 
ing of  intoxicants  and  injurious  drugs  should  be  discour- 
aged. The  highest  standards  in  all  lines  should  be  en- 
couraged. The  Pure  Food  Law,  recently  enacted,  which 
discourages  adulterations,  is  in  the  right  direction.  One  of 
the  Dakotas  compels  the  labeling  of  paints  with  the  exact 
ingredients.  Government  should  busy  itself  with  supplying 
its  people  by  encouraging  the  largest  and  the  best  possible 
supply  of  things  that  promote  their  happiness,  and  give 
special  care  to  the  things  needed  by  the  poor.  Then  there 
would  be  no  need  of  worrying  about  foreign  markets. 

To  give,  is  an  impulse  antecedent  to,  and  correlative  with, 
to  create.  Guaranteeing  abundant  use  by  all,  is  a  means, 
both  reasonable  and  humane,  to  promote  art  and  exchange. 
The  springs  of  output  which  are  not  drawn  upon,  like  the 


EXCHANGE  AND  ART  55 

cow  that  is  not  milked,  soon  goes  dry.  There  is  no  lack 
of  ever-willing  producers,  if  the  application  of  their  output  to 
its  ultimate  purpose  is  not  thwarted  by  greed;  for  "it  is  more 
blessed  to  give  than  to  receive." 


CHAPTER  III. 

Labor  and  Wages. 

ABOR,  as  one  of  the  two  factors  of  production,  em- 
braces more  than  is  meant  in  the  common  use  of 
the  term.  The  common  signification  is  mechan- 
ical, or  muscular  work,  the  more  intelligent  or 
trained  portion  of  such  workers  being  popularly  termed 
skilled  laborers;  those  untrained,  common  laborers.  Labor 
as  an  economic  term  includes  the  efforts  of  both  these  classes, 
and  more.  Labor  may  be  defined  only  as  a  factor  of  pro- 
duction. 

Labor  comprises  ell  human  action  tending  to  the  satisfac- 
tion of  desire.  It  includes  the  thought  applied  to  inventing, 
planning,  directing,  discovering,  and  organizing,  as  well  as 
the  muscular,  or  mechanical  effort  devoted  to  producing  sat- 
isfaction. 

Labor  is  not  synonymous  with  toil.  Toil  may  produce  no 
result.  A  desirable  result  is  essential  to  labor.  A  toilsome 
effort  usually  is  labor.  Labor  is  generally  unnecessarily  toil- 
some and  unpleasant.  The  belief  seems  to  be  widespread 
that  results  depend  on  strain,  weariness  and  worry.  But 
labor  may  be  the  greatest  of  pleasures.  The  most  intelligent 
business  decisions,  good  management  of  men  and  operations, 
are  not  dependent  on  strain  and  worry.  Neither  does  labor 
consist  in  mechanical  force  or  "horsepower."  A  half  dozen 
slight  persons  with  intelligence  may  produce  more  results 
than  an  army  of  muscular  ignoramuses. 

The  more  intelligent  the  worker  is,  the  more  he  employs 
nature's  forces.  A  stream  of  water  flowing  uselessly  down 
the  canon  may  be  confined  and  used  as  a  hydraulic  jet  to 
tear  down  and  move  the  very  m.ountains,  with  little  labor, 

56 


LABOR  AND  WAGES  57 

moving  more  dirt  and  washing  out  more  gold  than  infinite 
crude  labor.  The  master  laborer,  the  "captain  of  industry," 
brings  about  an  organization  which  turns  out  many  times 
the  former  output.  Yet  wages  are  not  generally  in  ratio  to 
the  importance  of  the  results  of  labor  to  society ;  for  the 
master  laborers,  who  make  not  alone  "two  blades  of  grass 
to  grow  instead  of  one,"  but  who  make  whole  plains  of 
desert  to  "blossom  as  the  rose,"  are  often  so  absorbed  in  their 
good  work  as  to  neglect  to  secure  their  rightful  pecuniary 
recompense. 

Workers  demand  a  compensation  for  their  Jabor  called 
wages.  As  all  productive  effort  and  service  is  labor,  so  all 
returns  for  such  effort  are  wages.  Wages  in  common  par- 
lance refer  to  a  payment  to  laborers  at  stated  intervals  by  a 
"boss."  But  as  an  economic  term,  wages  include  the  reward 
the  president  of  a  great  railroad  or  the  manager  of  a  great 
industry  receives  for  his  efforts.  Wages  are  not  only  pay- 
ment from  an  employer  to  an  employe,  but  include  as  well 
the  reward  for  effort  represented  in  the  product  of  one  work- 
ing for  himself.  Burbank's  profits  from  his  botanical  work 
are  his  wages.  The  game  is  the  reward  to  the  hunter ;  the 
fish  to  the  fisherman.  Under  primitive  conditions  the  laborer 
takes  the  whole  product  as  his  reward.  As  civilization  pro- 
gresses he  requires  capital  and  must  divide  the  product  with 
its  owner  as  interest.  Then  the  land  from  which  he  gets  the 
essentials  of  production  acquires  value  and  part  of  the  prod- 
uct must  go  as  rent  or  accessage. 

Education  oi*'  Laborers. 

The  processes  which  multiply  output  must  have  intelli- 
gent direction.  Seed  will  not  grow  with  advantage  unless 
skill  directs  its  planting.  The  product  of  chemical  action  is 
useless  unless  properly  conducted.  The  knowledge  requisite 
to  direct  processes  of  production  is  called  Science.  Science 
is  the  truth  discovered  and  adapted  to  a  useful  purpose.  The 


58  RIGHT  AND  RICHES 

results  of  science  on  the  output  of  useful  things  in  recent 
years  are  marvelous.  Electricity  alone,  which  is  merely  a 
process  and  not  a  physical  entity,  is  doing  the  work  formerly 
requiring  millions  of  men.  Output  has  not  simply  been 
added  to  by  Science,  but  multiplied.  What  is  the  price  of 
Science?  In  the  main  it  is  without  cost  to  whomsoever 
would  use  it.  It  belongs  to  Society  as  a  heritage  from  the 
past.  In  some  measure  Science  is  personal  property.  Some 
ideas  and  processes  are  vested  in  the  private  ownership  of 
those  who  discover  them,  but  only  for  limited  periods.  This 
is  right.  But  only  a  small  fraction  of  invention  or  discovery 
is  patented  or  copyrighted. 

Employers  of  labor  are  neglecting  a  most  profitable 
means  of  increasing  their  business  by  failing  to  establish 
technical  schools  in  connection  with  their  plants.  For  a  small 
cost  a  hall  could  be  built,  or  leased,  convenient  to  the  factory 
and  made  inviting  by  such  furniture  and  supplies  as  could 
be  afforded.  Some  one  skilled  in  the  line  of  production 
in  which  the  factory  is  engaged  could  be  had  to  give  lessons 
and  lectures  at  certain  periods.  All  sorts  of  literature  bear- 
ing on  the  line  of  production  should  be  kept  there,  available 
to  all  employes.  It  should  not  be  forgotten  that  the  cheap- 
est employe,  if  given  some  insight  into  the  art,  may  discover' 
important  improvements.  Such  places  could  also  be  made  to 
serve  as  clubs  for  the  men.  Decorations  and  furnishings 
could  be  partly  supplied  by  subscriptions  of  employes.  Pub- 
lic library  branch  stations  might  be  secured.  In  larger  estab- 
lishments, experimental  laboratories  could  be  had.  This  has 
been  done  by  some  proprietors  with  especially  splendid  re- 
sults, both  in  the  exceptional  quality  of  the  output  and  its 
wonderful  sale. 

Greater  skill  and  intelligence  of  employes  inevitably 
means  greater  profit  to  an  establishment  as  well  as  the  work- 
ers, and  especially  to  society. 


LABOR  AND  WAGES  59 

The  public  schools  should  co-operate  with  employers  in 
this  technical  training,  paying  a  share  of  the  expenses  of 
such  teachers.  The  regular  pupils  of  the  public  schools 
should  visit  these  industries  in  delegations  at  short  intervals, 
in  charge  of  teachers,  and  study  the  actual  workings  there- 
of. At  such  times  the  employes  and  teachers  could  discuss 
the  process  for  the  instruction  of  all.  By  this  means  the 
industries  would  get  better  results  from  their  operatives. 
The  children  of  the  schools  would  get  practical  ideas,  in- 
stead of  boarding  school  theories,  which  would  encourage 
them  not  alone  to  select  a  calling  for  life,  but  would  broaden 
their  ideas.  The  time  will  come  when  people  will  wonder  at 
the  stupidity  of  the  long  hours  now  spent  in  study  of  "long 
distance"  subjects,  tedious  history  of  wars,  or  things  won- 
derful because  far  away  in  distance  or  because  lacking  prac- 
tical import.  It  should  be  learned  that  the  finest  literary  or 
scientific  education  is  best  grounded  when  based  on  a  knowl- 
edge of  the  practical  things  right  about  us. 

Purpose. 

The  first  precept  that  should  be  taught  the  student  is  to 
seek  the  purpose  of  things ;  for  therein  is  the  inception  of 
every  progressive  thought.  What  is  the  purpose  of  a  win- 
dow in  a  certain  place?  Is  it  to  be  looked  out  of,  or  into? 
Is  it  desired  to  admit  the  air,  the  sunshine,  or  only  the  light  ? 
We  cannot  effectively  use  one  conventional  style  of  window 
for  all  such  purposes.  What  is  the  purpose  of  a  road  or 
street  in  a  certain  section?  Simply  to  front  houses  on?  No, 
it  is  to  "go"  on.  But  to  go  where  on  ?  To  the  center  of  the 
city  or  only  to  a  more  important  thoroughfare,  or  to  the  car 
line?  Is  a  road  simply  for  the  travel  of  some  isolated  farm- 
ers to  town,  or  for  the  great  streams  of  inter-city  or  inter- 
state travel?  How  stupid  that  wc  have  no  such  compre- 
hensive system  of  roads,  but  just  short  stretches,  which  are 
nearly  as  useless  as  would  be  a  fence  part  way  around  a 


60  RIGHT  AND  RICHES 

pasture.  What  is  a  jail  for?  To  torture  and  ruin  those 
put  in  it,  or  to  improve  them?  What  are  the  great  exposi- 
tions for?  To  make  money,  or  to  educate?  What  is  edu- 
cation for?  Which  is  a  system  of  railroads  for;  the  public 
or  the  owners  ?  What  is  taxation  for ;  to  make  us  poorer  or 
to  make  richer? 

It  is  sometimes  complained  that  college  graduates  can 
make  no  more  income  than  carpenters  or  plumbers ;  be  it  so 
— there  is  no  essential  injustice  implied. 

A  recent  article  stated  that  Germany  had  carried  technical 
education  to  the  extreme,  the  graduates  being  unable  to  se- 
cure positions  of  advantage.  But  does  this  argue  against 
the  great  advantage  of  such  schools  to  Germany?  Educa- 
tion is  largely  an  investment  made  by  society ;  and  to  society 
is  due  the  dividend.  If  the  education  is  of  the  right  kind, 
society  gets  dividends  a  hundred  fold. 

A  Northerner  asked  a  Southern  Priest  if  it  were  good  to 
educate  the  negro.  The  Priest  thought  not.  Why?  Be- 
cause of  his  antiquated  idea  of  what  education  is.  He  was 
then  asked :  Is  not  the  negro  who  has  been  taught  to  be  a 
good  mason,  carpenter,  cook  or  farmer,  worth  more  to  the 
community  and  himself  than  one  untaught?  "O,  yes,"  was 
the  reply.  "Then  is  not  that  education?"  asked  the  North- 
erner. And  is  not  the  failure  generally  in  the  kind  and  not 
in  the  quantity  of  education?  There  is  too  much  stereo- 
typing of  education.  Why  should  all  the  public  schools  of  a 
State  teach  the  same  thing  to  every  pupil  in  a  certain  grade, 
or  year?  There  should  be  the  greatest  variation  between 
one  city  and  another,  between  urban  and  rural  school;  and 
each  city  should  have  numbers  of  lines  of  study  which  might 
be  undertaken  by  different  individuals. 

What  does  the  multitude  need  of  Latin,  or  Shakespeare 
or  Algebra?  Some  individual  students  should  be  able  to 
study  architecture  instead  of  Latin,  cooking  instead  of  Al- 


LABOR  AND  WAGES  61 

gebra,  economics  instead  of  Caesar;  in  other  words,  present 
social  sense,  instead  of  ancient  savagery  and  stupidity. 

The  science  of  tanning  is  very  important  and  useful,  but 
it  is  needless  for  more  than  a  very  limited  number  to  learn  it. 

Gardening  has  more  tendency  both  to  broaden  character 
and  to  be  useful  than  too  much  mathematics.  How  to  dress 
becomingly  is  more  tending  to  elevate  both  individual  and 
society  than  tedious  volumes  on  how  nature  made  mountains. 
Every  dollar  the  community  spends  on  education  should  de- 
mand a  return,  not  in  bookish  parrots,  but  in  greater  diver- 
sity of  accomplishment ;  greater  beauty  and  harmony  in  the 
social  man.  The  shaping  of  courses  of  study  should  be 
made  with  reference  to  the  kind  of  accomplishments  which 
society  is  most  lacking.  A  good  crop  of  aldermen  should  be 
produced  and  put  on  the  market.  Then  might  come  a  course 
of  study  for  policemen.  A  course  entirely  without  law 
books,  for  prospective  judges,  would  tend  greatly  to  advance 
civilization. 

Children  should  be  instructed  in  both  the  essence  and  the 
forms  of  politeness.  They  should  be  taught  civic  pride,  how 
to  organize  and  act  in  unison  for  the  advancement  of  what 
they  believe  to  be  right.  There  should  be  as  perfect  solidar- 
ity in  the  army  of  industry,  the  army  of  civic  improvement, 
philanthropy  and  progress  as  in  the  army  of  war. 

But  while  bountiful  results  are  what  benefit  society,  are 
what  all  should  strive  for,  still  they  do  not,  with  our  present 
greedy  system,  immediately  determine  the  scale  of  wages. 
Wages  are  the  compensation  or  balance  between  desire  and 
hindrance.  This  hindrance  depends  on  the  laborers — upon 
what  they  demand  for  their  work.  Such  demand  depends 
on  incentive  and  power.  The  incentive  must  be  educated, 
the  power  organized.  It  must  always  be  remembered,  how- 
ever, that  the  wages  can  be  but  a  part  of  the  product.  Lib- 
eral wages  necessitate  liberal  production.  It  is  plainly  im- 
possible for  high  wages  to  result  from  a  small  output. 


62  RIGHT  AND  RICHES 

Labor  does  not  compete  with  labor  as  many  think,  but 
labor  furnishes  a  market  for  other  labor.  Isolated  incidental 
cases  there  may  be  where  it  competes,  such  as  where  an  ex- 
cessive number  learn  one  trade ;  but,  broadly  speaking,  labor 
is  paid  with  the  product  of  other  labor. 

Again,  increased  wages  may  fail  to  result  from  increased 
output,  first,  because  the  product  may  be  cheapened  in  con- 
sequence of  such  increased  supply.  Second,  because  labor 
is  but  one  of  two  factors  of  production  and  but  one  of  three 
recipients  in  the  division  of  output.  By  reason  of  cheaper 
price,  the  increased  output  may  not  have  increased  value, 
or,  having  greatly  increased  value,  such  value  may  be  taken 
by  capital,  or  concession,  as  increased  interest  or  rent. 

The  share  received  by  labor  depends  on  the  amount  and 
strength  of  the  laborer's  demands.  Strange  as  it  may  seem 
this  demand  is  not  in  any  degree  in  proportion  to  the  toil- 
someness  or  unpleasantness  of  the  work.  In  many  cases  it 
seems  even  to  be  in  inverse  ratio  to  such  suffering.  The 
most  pleasant  work,  even  arts  that  would  almost  be  pursued 
for  the  very  pleasure  of  accomplishment,  often  get  the  high- 
est pay.  Why  is  this  ?  Because  the  more  free,  refuse  both 
the  work  and  the  pay  of  the  ox.  Those  little  advanced  have 
not  the  initiative  to  rebel,  nor  the  power  to  compel  higher 
wages. 

There  is  a  sentimental  thought  that  industry  depends 
upon  these  poorly-paid  laborers,  and  a  "practical"  thought 
which  seeks  to  keep  these  workers  down  to  their  present 
level  so  that  they  will  not  refuse  to  bear  these  burdens.  Both 
are  wrong.  As  these  laborers  become  more  intelligent  and 
independent,  so  that  they  will  refuse  to  bear  these  burdens  so 
cheaply,  there  will  be  found  a  way  to  dispense  with  such 
tasks  without  discomfort  to  the  consumer.  "The  man  with 
the  hoe"  is  not  a  necessity. 

He  "that  grieves  not  and  that  never  hopes"  does  not 
bear  "on  his  back  the  burden  of  the  world." 


LABOR  AND  WAGES  63 

He  bears  a  useless  burden. 

Who  is  the  master  which  thus  enslaves  him? 

Who  but  his  own  perverted  thought,  his  ignorance, 
greed,  hate  or  fear,  his  indifference  to  his  neighbor  or  per- 
haps to  even  his  own  family? 

Love  is  the  law  of  liberty,  enlarging  the  capacity  and 
broadening  the  opportunity.  "For  all  the  law  is  fulfilled  in 
one  word,  even  in  this :  'Thou  shalt  love  thy  neighbor  as 
thyself.'  " 

There  is  a  worthy  Master  to  whom  he  may  go.  He  says 
"Come  unto  me  all  ye  that  labor  and  are  heavy  laden  and  I 
will  give  you  rest.  *  *  *  Learn  of  me,  for  my  yoke  is 
easy  and  my  burden  is  light." 

Five  men  in  a  certain  great  steel  mill  now  roll  with  elec- 
trical apparatus  thousands  of  tons  of  steel  daily  from  ingots 
— an  output  that  a  few  years  ago  would  have  required 
hundreds  to  have  toiled  in  the  heat.  The  abolition  of  slavery 
in  the  South  has  multiplied  the  output  and  enjoyment  of 
wealth.  Much  work  is  drudgery  solely  owing  to  the  con- 
ditions under  which  ir  is  pursued.  Tending  a  garden  is  the 
most  genteel  pursuit,  or  the  dullest  toil,  according  to  the 
motive  of  the  worker. 

When  workingman,  as  well  as  millionaire,  learns  that  the 
true  way  to  rise  to  freedom  from  poverty  is  not  by  treading 
upon  others,  poverty  and  toil  will  cease  upon  the  earth. 
"God  gave  man  dominion  over  all  the  earth"  but  not  as 
many  would  construe  it.  He  did  not  give  one  person  do- 
minion over  others.  The  power  to  command  others  is  not 
a  righteous  motive  for  business,  or  the  acquisition  of  wealth. 
The  proper  purpose  of  wealth  is  the  good  it  will  do.  Hence 
value,  price,  is  not  an  essential  of  wealth  in  its  true  charac- 
ter, though  those  high  in  position  teach  that  it  is. 

Natural  wholesome  labor  is  the  result  of  "loving  our 
neighbor  as  (being  one  with)  ourselves."  Such  labor  pro- 
duces the  great  results  and  wearies  least. 


64  RIGHT  AND  RICHES 

"And  who  is  my  neighbor?"  Plainly  the  one  we  meet 
in  the  way;  not  alone  the  member  of  our  church,  tribe,  city, 
or  nation ;  but  he  who  needs  our  sympathy. 

The  Time  Factor. 

One  of  the  most  important  elements  of  labor  is  TIME. 
We  would  all  prefer  to  have  our  time  at  our  own  disposal, 
to  use  as  we  please.  Moreover,  there  are  expenses  which 
occur  with  the  lapse  of  each  day  and  month.  Hence,  there 
has  arisen  the  practice  of  paying  for  labor  by  the  day.  This 
is  in  some  measure  being  displaced  by  the  piece-work  sys- 
tem. 

Workers  should  be  given  an  insight  into  the  whole  scope 
of  the  business  of  their  employer;  should  be  changed  from 
one  phase  of  work  to  another.  Employers  should  seek  to 
interest  workers  in  the  final  results  and  not  treat  them  as 
machines. 

All  should  labor.  No  one  should  be  compelled  to  drudge. 
Labor  is  ennobling.  Drudgery  is  degrading.  The  highest 
intellectual  endeavor  is  labor.  Application  to  any  art, 
whether  that  classed  as  fine  art,  or  commercial  art,  is  labor. 
Indeed  any  art  is  "fine  art"  if  finely  accomplished.  Nothing 
gives  more  lasting  pleasure  than  accomplishment.  Nothing 
has  such  refreshing  and  renewing  efifect  as  to  see  results  ac- 
cruing from  honest  effort.  Surely  it  is  a  reflection  of  the 
Nature  of  Our  Maker.  What  a  pity  that  so  many  seem  de- 
prived of  the  chance  to  do  wholesome  labor.  Millions  are 
seemingly  so  deprived  by  concession's  engrossment  of  re- 
sources. Millions  more  toil  at  depressing  drudgery.  Others 
are  deprived  by  caste,  by  their  belonging  through  birth  or 
wealth,  to  the  leisure  class  caste.  But  you  say  they  might 
work  if  they  would.  Very  truly ;  but  it  requires  true  cour- 
age for  a  man  of  wealth  to  turn  aside  from  the  selfish  occu- 
pation  of  exerting  authority,  embraced  in  ownership  of 
wealth,  from  speculation  and  spoliation,  to  wholesome  labor. 


LABOR  AND  WAGES  65 

It  is  also  unfortunate  that  so  many  persons  are  engaged 
in  useless  pursuits.  And  under  our  topsy-turvy  system  of 
commerce  this  class  includes  those  of  the  best,  as  well  as 
those  of  the  worst  characters.  For  how  many  consider  it  of 
any  importance  that  his  work  should  benefit  society? 


CHAPTER  IV. 

Wealth. 

HERE  is  a  class  of  property  that  is  sought  for  the 
purpose  of  being  consumed. 

To  be  consumed  means  to  be  used  up.  Not 
essentially  destroyed  at  once,  but  in  a  period  of  a 
few  months  or  years.  Food,  clothing,  houses,  vehicles,  orna- 
ments, machinery  and  such  things,  taken  as  a  whole,  are 
rapidly  used  up,  or  they  decay  in  a  short  time  after  being 
fitted  for  use.  Hence,  to  maintain  a  stock  of  such  things 
there  must  be  constant  new  supplies  procured.  This  class 
of  property  is  termed  wealth. 

Writers  on  economics  for  some  reason  seem  to  have  had 
a  hard  time  defining  this  class  of  property.  They  all  seem 
to  have  much  the  same  thing  in  mind,  but  their  definitions 
are  so  poor  that  they  become  greatly  confused  thereby. 

To  properly  define  wealth  is  of  absolute  necessity,  in  or- 
der to  have  any  reliable  foundation  for  a  definite  considera- 
tion of  the  subject;  for  economics  is  the  study  of  wealth. 
Some  definitions  call  it  "stored  labor."  This  leads  us  astray. 
Others,  "a  product  of  labor,"  which  is  equally  faulty.  Some 
include  notes,  bonds  and  other  evidence  of  credit ;  some  even 
include  land.  By  the  following  definition  I  think  we  may 
identify  it  under  all  circumstances. 

Wealth  comprises  that  class  of  property  ivhich  is  being 
continuously  consumed  in  enjoyment  and  reproduction;  and 
continually  replenished  by  output. 

Output  means  simply  the  putting  of  nezv  supply  on  the 
market.  It  does  not  imply  labor,  though  labor  may  promote 
such  supply.  It  may  accrue  entirely  from  land  or  from  Cap- 
ital without  labor.     Output   comprises  all   desirable  things 

66 


WEALTH  67 

which  come  upon  the  market  from  natural  causes  or  promo- 
tive effort,  accruing  periodically  or  continuously,  in  contra- 
distinction to  native  or  permanent  property. 

Land,  mineral  deposits  and  forests  exist  practically  per- 
manent in  their  native  condition.  They  are  fixed  entities. 
Grass,  animals,  fruits,  etc.,  manufactures,  buildings,  ships, 
are  output.  Growing  crops,  orchards,  vineyards,  etc.,  are 
output.  Output  and  permanent  property  merge  together  un- 
til the  distinction  becomes  one  of  period.  Things  accruing 
in  a  period  longer  than  an  ordinary  generation  begin  to  have 
the  nature  of  fixities.  So  also  do  structures  enduring  longer 
than  a  generation.  Nothing  is  wealth  which  is  not  from 
Output.  Land  is  not  wealth ;  it  does  not  accrue  periodically, 
nor  is  it  consumed  by  use  or  time.  Franchises,  patents,  evi- 
dences of  debt  are  not  wealth ;  they  are  not  consumed  in  en- 
joyment. Grass  grows  without  labor,  yet  grass  is  an  output. 
But  is  all  grass  wealth  ?  No,  only  that  which  is  property, 
which  has  value  from  being  controlled  by  someone. 

Value  is  of  the  essence  of  wealth  as  of  property  in  gen- 
eral. Is  stone  wealth?  Yes,  if  for  the  purpose  of  con- 
sumption it  has  been  moved  from  its  natural  bed  to  a  point 
more  available  for  use.  Does  not  labor  create  wealth?  It 
contributes  to  its  value,  it  increases  its  value,  by  charging 
wages  for  making  it  more  available  or  desirable.  Does  na- 
ture, sunshine,  rain,  soil,  create  wealth?  No,  they  cannot, 
as  they  charge  nothing  for  their  service.  Does  not  land 
contribute  to  it?  No.  Land  grows  utilities,  its  work  is 
without  charge.  The  products  of  land  become  wealth  by 
reason  of  the  landlord's  charge  for  them.  Is  the  destruc- 
tion of  a  forest  by  fire  "consumption?"  No,  it  is  waste. 
Consumption  means  use.  Is  a  railroad  wealth?  Yes, 
tracks,  grades,  tunnels,  cars,  equipment  and  buildings  are. 


68  RIGHT  AND  RICHES 

They  are  consumed  through  use  and  must  be  renewed.  Is 
a  city  lot  wealth?  No.  Are  lots  not  turned  out  and  put 
on  the  market?  Lots  are  not  an  output.  They  are  not 
changed  from  their  places  and  nature,  are  not  consumed.  Is 
corporation  stock  wealth?  No.  It  has  not  utility  to  be  con- 
sumed. 


CHAPTER  V. 

Capital,  Increase  and  Interest. 

[I HAT  is  capital?     Capital  comprises  all  wealth,  of 
which  the  enjoyment  is  beini^;  deferred  that  it  may 
increase  in  value  or  be  used  to  facilitate  output  of 
wealth.     Capital  is  of  two  classes,   STOCK  and 
EQUIPMENT. 

What  is  STOCK?  Any  material  accumulation  in  any 
kind  of  industry  from  which  a  final  supply  to  consumers  is 
to  come  is  called  Stock.  Seed,  ores,  wood,  coal,  animals, 
growing  crops,  grain  for  milling,  fibres  for  spinning,  logs 
for  sawing,  are  crude  stocks.  Flour,  boards,  thread,  leather, 
pig  iron,  lime,  etc.,  are  slightly  developed  stocks.  Bread, 
furniture,  clothing,  shoes,  stoves,  etc.,  are  manufactured 
stocks.  Dry  goods,  hardware,  millinery,  etc..  are  merchan- 
dise stock  which  only  lack  selling  to  users.  When  bought 
by  users,  these  things  cease  to  be  stock. 

Equipment  comprises  any  wealth  which  is  being  used  to 
handle  stock,  to  move,  plant,  cultivate,  clean,  separate,  com- 
bine or  otherwise  manipulate  it.  Plows,  wagons,  horses, 
cars,  ships,  machinery,  bridges,  barns,  warehouses,  shops, 
fixtures,  etc.,  when  used  in  industry  are  Equipment.  Cap- 
ital consists  solely  of  WEALTH.  Capital  is  comprised  only 
of  stock  and  equipment.  Land,  notes,  bonds,  franchises, 
mines  are  not  capital.  Neither  credit  nor  money  is  capital. 
Nothing  but  wealth  is  capital,  and  only  that  wealth  which  is 
at  the  time  devoted  to  increase  in  value  or  to  assisting  out- 
put, which  constitutes  either  stock  or  equipment.  Capital 
depends  on  TIME  for  its  effects.  By  allowing  sufficient 
time  many  natural  and  chemical  changes  take  place  in  stock. 
Animals  and  crops  grow,  wood  seasons,  chemical  action  sep- 

69 


70  RIGHT  AND  RICHES 

arates  various  elements  and  combines  others.     Time  is  re- 
quired to  manufacture  and  move  stock. 

Equipment  is  made  effective  only  by  time.  A  mill  will 
saw  so  much  lumber  in  a  day,  a  m.achine  will  press  but 
so  many  brick,  a  ship  or  car  will  travel  but  so  far  wdth  its 
load. 

Stock  and  equipment  are  effective  in  proportion  to  the 
time  they  are  applied.  Here  is  the  origin  of  interest.  While 
wealth  is  capital,  wdiile  it  is  being  used  as  stock  or  equip- 
ment, it  may  not  be  devoted  to  enjoyment.  One  wishes  to 
enjoy  at  once  whatever  he  has.  The  poor  child  hastens  to 
buy  candy  with  the  dime  someone  gives  it.  The  adult  has 
the  same  impatience,  but  perhaps  under  better  control.  What 
woman  is  not  anxious  to  get  her  new  dress  home,  or  what 
man  is  not  anxious  to  try  his  new  gun?  But  adults  are 
guided  by  reason.  They  will  give  up  one  thing  if  they  are 
offered  something  equally  suitable  instead.  They  will  de- 
fer enjoyment  if  the  consideration  is  sufficient.  The  child 
will  eat  the  apple  green.  The  adult  waits  for  it  to  ripen  and 
thereby  gets  much  greater  pleasure.  Interest  is  the  price 
received  by  ow'ners  of  wealth  for  waiting.  Interest,  like  the 
price  of  anything,  is  the  compromise  between  desire  and 
hindrance.  The  desire  for  capital  is  for  its  advantages  in 
industry.  The  hindrance  to  its  use  is  owners'  aversion  to 
waiting.  Owners  seek  as  large  a  rate  of  interest  as  pos- 
sible, but  users  will  pay  as  little,  obviously  they  can  pay  no 
more  than  the  increase  they  can  secure  by  use  as  stock  or 
equipment.  It  is  mistakenly  thought  by  some  that  the  aver- 
age natural  increase  is  the  current  rate  of  interest. 

The  origin  of  the  word  capital  is  from  the  Latin  caput  or 
head.  The  greatest  capitalists  of  old  were  owners  of  herds. 
They  counted  their  wealth  by  the  head.  Cattle  on  the 
boundless  range  is  yn  ideal  example  of  capital.  In  early 
days  on  the  Western  plains  a  few  cows  were  a  capital  which 
speedily  grew^  into  a  fortune.     The  owners  were  compelled 


CAPITAL.  INCREASE  AND  INTEREST         71 

to  abstain  from  killing-  or  marketino^  them  in  order  for  the 
herd  to  grow. 

Thk  Law  of  Inte:re;st. 

Interest  is  that  part  of  the  increase  of  wealth  accruing 
to  ozvners  or  lenders  from  its  use  as  capital — as  stock  and 
equipment. 

Lending  is  but  one  way  of  getting  interest.  The  most 
extensive  way  is  to  apply  it  to  industry  and  get  the  natural 
increase.  Borrowing  and  lending  is  a  dangerous  method  of 
applying  wealth  to  increase.  The  lender  of  capital,  on  the 
average,  simply  gets  a  part  of  the  natural  increase.  Henry 
George  seemed  to  think  that  this  "increase"  was  limited  to 
natural  growth,  as  of  vegetation  or  animals.  He  very  clear- 
ly showed  the  fallacy  of  the  old  school  conception  of  interest, 
which  regarded  as  interest  the  increased  product  which  labor 
was  able  to  turn  out,  when  supplied  with  tools  or  machinery, 
over  what  it  could  produce  without  them.  Then  he  went  to 
the  other  extreme  and  concluded  that  there  is  no  power  of 
increase  in  tools,  machinery,  etc. 

Let  us  see.  Suppose  we  resort  to  the  useful  illustration 
of  the  small  community,  a  hundred  workers  on  an  isolated 
island.  The  only  timber  on  this  island  is  away  up  in  the 
mountains,  inaccessible  by  wagon.  The  only  means  of  get- 
ting it  is  for  some  of  these  workers  to  carry  it  down  on 
their  shoulders,  or  perhaps  on  the  backs  of  burros,  at  a  cost 
of  tremendous  labor.  Thus  while  abundance  of  timber  is 
in  these  mountains,  this  community  is  limited  to  a  very 
scant  supply.  After  suffering  from  this  scarcity  for  some 
time,  they  arrange  to  set  ten  of  their  number  to  building  a 
flume,  compensating  them  therefor  from  the  produce  of  the 
remaining  ninety. 

This  flume  when  completed  is  capital.  It  gives  an  annual 
increase  in  wealth  in  wood,  lumber,  etc.,  of  perhaps  five 
hundred  per  cent,  of  its  cost.     In  other  words,  their  new 

8— 


73  RIGHT  AND  RICHES 

supply  of  wood  would  have  taken  by  the  old  method  the 
labor  of  more  than  half  their  number,  whereas  now  it  takes 
that  of  but  one  man.  Or  suppose  that  they  had  procured 
their  water  by  carrying  it  a  long  distance  and  now  dig  a 
well.  This  well-capital  gives  them  an  increased  supply  of 
many  hundred  per  cent.  Or  suppose  that  by  building  a  sea- 
worthy boat  with  the  labor  of  ten  of  their  number  for  some 
months,  this  boat-capital  now  allows  them  to  procure  in- 
creased supplies  of  fruit,  fish,  animals,  eggs,  etc.,  from  the 
sea  and  the  adjacent  islands.  Does  not  the  wealth  invested 
in  the  boat  give  a  natural  increase  for  interest  as  truly  as 
though  devoted  to  growing  such  things?  To  society,  the 
rate  of  interest  by  such  facilities  is  commensurate  with  the 
increase  of  output. 

But  boats  and  flumes  do  not  give  to  their  owner  a  rate  of 
interest  in  proportion  to  what  they  furnish  supplies  in  excess 
of  what  could  be  carried  on  men's  backs.  A  modern  sawmill, 
cutting  perhaps  several  thousand  times  the  lumber  per  em- 
ploye that  would  be  cut  by  a  handsaw,  has  not  interest  effect- 
iveness of  several  hundred  thousand  per  cent,  to  its  owner, 
but  perhaps  only  five,  or  six,  or  seven  per  cent.  Here  is 
the  vital  point  which  ]\Tr.  George  tries  to  explain  by  the 
theory  that  the  exchangeableness  of  wealth  averages  inter- 
est, and  therefore  the  "mill  wealth"  takes  up  its  average 
share  of  the  "increase  power"  contributed  to  the  whole  sum 
of  wealth  by  vegetable  and  animal  growth. 

But  there  is  not  an  averaging  or  leveling  in  the  natural 
increase  of  output  given  by  capital  in  various  enterprises, 
whether  we  count  the  output  by  volume  or  value.  This 
natural  increase  varies  without  limit  in  various  enterprises, 
but  it  does  not  all  accrue  to  the  capital  owner  as  real  in- 
terest. 

The  capital  owner  often  gets  but  a  small  part  as  interest. 
He  must  usually  divide  this  increase  with  the  owner  of 
"concession,"  that  is,  the  owner  of  the  land,  franchise,  etc.. 


CAPITAL,  INCREASE  AND  INTEREST         73 

on  which  the  enterprise  depends.  Obviously,  then,  the  aver- 
age rate  of  natural  increase,  or  natural  advantage  from  the 
use  of  capital  is  not  the  same,  nor  has  it  any  approximate 
ratio  to  the  average  or  current  interest  rate.  I'his  is  a  vital 
point  in  economics.  What,  then,  is  the  basis  of  the  current 
rate  of  interest? 

The  demand  for  equipment  and  stock — capital — arises, 
as  we  have  just  stated,  from  the  real  creative  increase  power 
of  capital.  Those  having  use  for  it  get  it  from  those  who 
will  furnish  it  the  cheapest,  hence : 

The  current  interest  rate  is  the  compromise  agreement 
betiveen  accumulators  of  wealth  and  those  who  seek  it  to  use 
as  capital. 

The  accumulators  of  wealth  will  refuse  to  saz'e  if  up, 
defer  its  enjoyment,  below  a  minimum  rate,  depending  some- 
what on  how  much  it  reduces  their  subsistence  expenditure 
below  their  "standard"  of  living.  Hence,  the  rate  of  in- 
terest, paid  to  capital,  invested  in  the  most  productively  ef- 
fective equipment,  is  no  more  than  in  the  most  common 
essentials  of  industry.  A  sailing  ship,  on  the  average,  even 
to-day,  pays  as  good  profit  on  the  amount  invested  as  the 
most  modern  steamer.  The  share  of  output  which  is  the 
rcs-ult  of  the  use  of  capital  is  the  increase  of  output  caused 
by  the  devotion  of  wealth  to  purposes  of  increase ;  whether 
as  seed  for  planting,  stock  for  growing,  machinery  or  equip- 
ment, ships,  railroad  rails,  ties  and  cars.  All  true  capital 
gives  a  real  increase  from  which  interest  is  paid,  and  as  cap- 
ital may  be  augmented  or  replenished  from  the  general  fund 
of  wealth,  there  is  a  leveling  or  averaging  of  the  rate  of  in- 
terest of  wealtli  devoted  to  every  purpose. 

But  may  not  any  property  in  any  use  pay  interest?  In 
the  common  use  of  the  term,  yes.  One  may  pay  interest  on 
the  price  of  a  piano  or  a  watch,  used  alone  for  pleasure,  or 
for  the  price  of  land.  This  should  be  termed  fictitious  in- 
terest.    All  property  is  exchangeable.     A  cow  may  be  ex- 


74  RIGHT  AND  RICHES 

changed  for  a  dress,  money  for  merchandise,  credit  for 
money  or  machinery.  Now  interest  for  capital  is  based  on 
the  time  it  is  used  and  its  VALUE,  on  the  amount  of  wealth 
or  value  comprised  in  the  capital,  and  not  on  its  utility. 
Ten  men  may  each  borrow  a  thousand  dollars'  worth  of  cap- 
ital to  use  in  ten  ditlerent  branches  of  industry.  Each  pays 
the  market  rate  of  so  much  per  cent.,  irrespective  of  what 
it  increases  output.  Because  a  steam  thresher  threshes  out 
thousands  of  times  the  grain  that  could  be  threshed  in  the 
same  time  with  a  club,  that  does  not  determine  its  interest 
value.  Its  interest  \alue  is  based  on  how  much  wealth  it 
comprises,  how  much  value  it  is  postponing  the  use  of.  A 
brush  not  worth  two  cents,  dragged  over  a  field,  may  do  the 
work  of  a  thousand  hoes,  yet  not  be  capital.  The  lenders 
do  not  care  whether  threshers,  railroad  cars,  or  printing 
presses  are  procured  with  what  they  lend.  They  expect  so 
much  interest  each  year  for  each  hundred  dollars  value.  In- 
terest is  the  price  of  deferring.    It  is  paid  out  of  increase. 

If  one  has  property  which  specifically  may  not  be  ap- 
plied as  capital — as  stock  or  equipment — he  may  readily  ex- 
change it  for  the  same  value  of  real  capital ;  hence,  if  he 
lend  it  to  another  or  sell  it  to  him  to  be  returned  or  paid 
for  in  a  year,  he  will  expect  the  same  interest  that  he  could 
have  received  by  exchanging  it  for  real  capital  and  letting 
it  be  used  in  industry.  Governments  formerly  were  heavy 
payers  of  fictitious  interest  with  taxes  wrung  from  their  sub- 
jects. Money  is  not  capital,  because  on  the  average  it  neither 
grows,  nor  causes  to  grow  with  lapse  of  time. 

There  must  of  necessity  be  a  fund  accruing  to  pay  in- 
terest; people  cannot  pay  interest  very  extensively  unless  it 
is  accruing  from  what  the  debt  was  incurred  for.  Deferred 
payments  for  land  are  the  greatest  source  of  fictitious  in- 
terest. But  the  land  may  pay  rent.  The  borrower  looks 
to  a  particular  species  of  wealth  when  he  borrows — certain 
tools,  engines,  structures,  which  will  facilitate  production. 


CAPITAL.  INCREASE  AND  INTEREST         75 

A  stock  of  a  certain  species  of  goods  whose  value  is  being 
made  greater  by  being  shipped  to  another  place  or  by  being 
retailed  to  consumers,  is  capital.  Only  a  fraction  of  capital 
is  borrowed. 

An  increase  of  capital  in  a  community  or  nation  tends 
to  increase  the  abundance  of  subsistence  for  all,  hence  its 
use  should  not  be  discouraged  by  capital  being  taxed. 

But  the  effects  of  Time  are  not  alone  to  increase  or  im- 
prove wealth  but  to  destroy  it.  When  any  natural  deposit  or 
resource  is  moved,  modified  or  changed  from  its  natural  place 
or  condition  to  make  it  more  useful,  from  that  moment  it 
must  be  cared  for  and  further  improved  until  ready  to  be 
consumed,  or  time  will  begin  to  destroy  whatever  value  is 
promoted  in  it.  Time  is  a  destroyer  as  well  as  a  producer 
of  Wealth.  This  tendency  to  decay  is  one  thing  that  dis- 
tinguishes wealth  from  concession  property. 

Time  does  not  destroy,  but  renews  Natural  resources. 
Cut  timber  rots,  quarried  stone  slacks,  mined  coal  becomes 
useless.  Loss  and  destruction  also  come  unexpectedly  and 
take  wealth  away,  so  that  by  deferring  use  we  may  forever 
lose  it.  Risk  therefore  joins  with  impatience  to  increase 
owners'  reluctance  to  defer  use.  Good  government  reduces 
risk  and  thereby  promotes  accumulation  of  capital. 

Capital  is  one  feature  which  distinguishes  civilization 
from  barbarism.  This  is  both  because  Capital  contributes 
to  civilization,  and  because  civilization  eliminates  enough 
of  the  risk  of  loss  to  encourage  large  accumulation  of  cap- 
ital. Capital  in  the  United  States  to-day  is  perhaps  safer 
from  violence  than  it  ever  was  anywhere,  at  any  time  be- 
fore. This  is  one  of  the  many  objects  of  government.  But 
much  yet  remains  to  be  done,  not  in  protecting  wealth  from 
violence,  but  from  the  processes  of  manipulators  of  finances, 
stocks,  and  real  estate  speculation. 

No  credit  is  capital.  Credit  which  represents  the  price 
of  stock  or  equipment  constitutes  a  quasi-ownership  of  such 


76  RIGHT  AND  RICHES 

capital  which  we  might  term  LATENT  TITLE  to  capital. 
This  Latent  Title  of  the  creditor  is  subject  to  the  active, 
apparent,  title  of  the  borrower.  But  credit  for  which  the 
debtor  received  no  real  capital,  but  only  land,  personal  con- 
sumption, or  loss,  has  no  relation  whatever  to  capital. 

Real  capital  increases  the  actual  supply  of  wealth  in  the 
community.  This  is  the  class  of  capital  usually  considered 
in  economic  study  as  capital. 

Wealth  increasing  in  value  or  contributing  to  the  in- 
crease or  creation  of  other  wealth  is  actual  Capital.  Noth- 
ing but  wealth  can  be  Capital.  Crops  growing,  goods  in 
transit  to  where  their  value  is  greater,  materials  in  process 
of  improvement  in  shape  or  quality,  are  capital. 

Much  confusion  has  grown  out  of  misunderstanding  the 
function  of  capital.  It  was  formerly  said  to  be  to  supply 
stock  and  equipment  to  be  used  in  the  work,  and  a  fund  to 
pay  wages  called  a  wage- fund.  Modern  economists  of  any 
discernment  see  that  capital  does  not  supply  a  wage-fund. 
That  fund  is  continually  produced  by  workers.  The  pro- 
prietor of  the  producing  concern  exchanges  another  form 
of  property  to  the  workers  from  time  to  time  for  their  share 
of  the  product.  This  may  be  money,  credit,  or  other  mer- 
chandise. Whatever  is  so  exchanged  is  called  wages.  The 
workers  now  have  not  more  wealth,  but  it  is  of  a  kind  more 
ready  for  their  use.  The  proprietor  has  as  much  or  more 
wealth,  but  must  market  it.  A  manufacturer  finds  at  the 
end  of  a  week  an  increase  in  value  of  stock  by  reason  of 
work  done  on  it,  of  more  than  $1,000.00.  He  buys  this  by 
paying  the  workmen  $1,000.00  wages.  Suppose  he  has  stip- 
ulated that  they  should  have  so  much  wages ;  that  does  not 
change  the  fact  that  they  are  producing  them  in  the  new 
wealth  created. 

But  it  is  argued  that  the  manufacturer  must  have  this 
fund  to  begin  with,  else  he  could  not  pay  the  wages.  Do 
not  all  manufacturers  get  the  money  from  week  to  week, 


CAPITAL.  INCREASE  AND  INTEREST         77 

and  month  to  month  to  pay  wages,  from  the  sale  of  goods? 
But  grant  that  they  do  not  sell  the  stock  before  pay  day  or 
before  several  pay  days ;  that  they  must  go  on  buying  the 
workmen's  share  for  several  pay  days,  before  entirely  com- 
pleted or  marketable  output  is  furnished,  what  is  this  but 
buying  an  added  supply  of  more  nearly  finished  stock?  Is 
it  not  common,  usual,  for  stock  to  pass  tlirough  many  hands 
before  completion? 

Suppose  one  is  making  articles  of  steel  from  steel  bars 
which  he  buys;  then  he  builds  a  rolling  mill  and  rolls  the 
bars ;  then  a  furnace  and  makes  the  pig ;  then  ovens  and 
makes  the  coke;  then  mines  and  digs  the  coal.  Now  is  he 
not  as  truly  buying  coal  when  he  pays  the  miners  wages,  or 
pig  when  he  pays  the  furnace-men's  wages,  as  when  he  for- 
merly bought  such  bars  in  the  market.  What  appears  to  be 
a  wage  fund  is  rather  a  part  of  the  STOCK  FUND.  Pro- 
duction is  a  continuous  process.  The  Singer  Sewing 
Machine  Co.  sells  so  many  machines  each  year,  and  pays  so 
much  wages,  just  as  truly  as  it  pays  so  much  wages  and  sells 
so  many  machines.  The  producer  of  food  is  continuously 
exchanging  some  of  his  stock  for  part  of  the  stocks  of  fuel, 
fabrics,  etc. 

The  average  opportunity  to  use  capital  profitably  in  man- 
ufacturing, shipping,  agriculture  or  merchandising,  deter- 
mines the  demand  for  it.  When  such  undertakings  are 
profitable  much  capital  is  sought  and  interest  is  higher. 
When  they  are  dull  interest  rates  are  low.  When  those 
undertakings  are  prosperous  there  is  prosperity.  Wages  are 
also  high.  When  interest  is  too  low  peqple  refuse  to  devote 
so  much  wealth  to  capital.  Some  that  has  been  so  applied 
is  consumed,  some  wasted. 

Wealth  is  like  a  stream.  It  flows  from  the  springs  of 
output  continuously.  There  may  be  lakes  or  partially  sta- 
tionary water  through  which  a  stream  passes.  Water  taken 
from  such  places  is  the  same  as  taken  from  the  stream ;  it  is 


78  RIGHT  AND  RICHES 

replaced  from  the  stream.  Some  portion  of  wealth  appears 
to  be  fixed.  Buildings,  bridges,  etc.,  are  quite  durable. 
Some  economists  make  much  of  this  slight  distinction.  But 
where  is  wealth  that  is  not  deteriorating  by  either  decay  or 
change  of  style  ?  How  much  machinery,  or  printing  presses, 
or  ships,  or  railroad  equipment  of  ten  years  ago,  is  of  much 
value  now  even  if  as  sound  as  new?  Now,  just  as  water 
is  taken  from  a  stream  and  diverted  to  turn  a  dynamo,  so  is 
part  of  this  stream  of  wealth  diverted  at  or  near  its  source 
into  capital. 

The  water  is  taken  from  a  certain  Western  irrigating 
ditch  to  produce  electricity  and  then  returned  to  the  ditch, 
thus  producing  a  considerable  additional  supply,  pumped  by 
the  electricity  from  wells. 

So  capital  is  returned  to  the  stream  of  wealth  augmented. 
Prosperity  is  increase  in  the  output  and  enjoyment  of  wealth. 
In  common  parlance  all  property  is.  indifferently,  called 
wealth  and  capital.  The  definite  distinction  seems  impossible 
to  many  writers  on  economics.  The  distinction  between 
wealth  and  land  is  very  wide.  Land  exists  naturally. 
Wealth  is  largely  the  result  of  human  initiative.  It  is  ac- 
cumulated for  capital  by  the  passive  effort  of  humanity.  If 
the  whole  supply  of  wealth  were  destroyed  it  could  be  al- 
most completely  restored  in  a  few  months  by  effort  and 
abstention.  The  supply  of  land  continues  as  it  has  been. 
It  may  not  be  increased,  but  its  price  and  the  rent  for  its 
use  increase  with  population  and  progress.  He  who  pro- 
duces five  hundred  dollars'  worth  of  wealth  a  year  may  con- 
sume but  half  of  it  and  apply  the  other  half  as  capital. 

There  is  perhaps  three  times  the  capital  now  in  the  coun- 
try there  was  ten  years  ago.  There  is  no  limit  to  the  supply 
of  capital  that  might  be  furnished,  except  the  limitation  on 
the  opportunity  to  use  it. 

Hence,  Labor  and  Capital  are  the  partners  of  Produc- 
tion.    They  are  the  human  forces  that  change  native  ele- 


CAPITAL,  INCREASE  AND  INTEREST  79 

ments  into  those  things  we  desire.  Interest  is  as  jiist  and 
meritorious  a  charge  as  wages.  The  payment  of  hberal  in- 
terest helps  replenish  wealth.  Accessage  is  the  predatory 
charge.  Any  person,  if  he  have  opportunities,  may  labor 
and  cause  output  of  wealth.  Any  person  who  lacks  capital 
may  save  it  if  he  is  producing  an  output.  Laws  which  seek 
to  limit  interest  on  loans  to  a  rate  below  the  current  aver- 
age abstention  price  of  capital  are  not  only  ill  advised,  but 
futile.  Reasonable  usury  laws  protect  the  inexperienced 
from  disreputable  sharks.  But  liberal  rates  should  be  al- 
lowed, especially  where  payments  may  be  made  in  monthly 
installments,  and  notes  should  never  be  taxed. 

The  tremendous  excess  of  the  rate  of  increase  from  cap- 
ital, above  the  current  rate  of  interest  that  is  allowed  the 
investing  public,  is  not  commonly  observed. 


PART   FOUR. 


Sharing  of  Output. 

Chapter    I.     Concession. 

"         II.     "Living"    Rates    oe    Interest    and 

Wages. 
"       III.    The  Eminent  Domain  oe  Greatest 

Eeeiciency. 
"        IV.    The  ConsuxMEr's  Rights. 
"         V.     The  Producer's  Rights. 
"       VI.     Society's  Rights. 


CHAPTER  I. 

CONCKSSION, 

"My  people  are  destroyed  from  lack  of  knowledge." 

— Hosea. 

AVING  examined  the  function  of  Labor  and  Capital 
in  production,  we  see  that  they  transform  the  re- 
sources of  nature,  assisted  by  science  and  the  ad- 
vantage of  social  progress,  into  wealth  and  service 
for  the  satisfaction  of  desire. 

But  we  find  that  labor  and  capital  do  not  receive  as  tlT,e 
reward  of  their  service  all,  nor  nearly  all.  of  the  product. 
There  is  a  third  recipient  of  output  which,  though  it  neither 
"toils  nor  spins,"  receives  a  share  larger  than  either  labor 
or  capital,  perhaps  larger  than  both.  This  third  claimant 
may  be  termed  "Concession." 

In  current  works  on  economics  the  term  "Land"  is  used. 
It  is  not  by  them  restricted  to  agricultural  or  any  particular 
class  of  land,  but  is  meant  to  include  such  control  as  may  be 
obtained  of  natural  elements,  to  compel  the  payment  for 
their  use. 

This  use  of  the  word  "Land"  to  designate  such  author- 
ity, seems  to  me  to  be  not  only  confusing,  both  to  reader 
and  writer,  but  even  with  the  meaning  assigned  to  it  by 
such  authors,  inadequate  to  cover  the  sharing  of  the  third 
party  to  the  division  of  output.  It  was  adopted  long  ago 
when  agriculture  was  of  much  greater  relative  importance, 
and  when  franchises  and  monopolistic  property  was  of  small 
relative  consequence. 

"Concession"  is  a  word  which  we  have  not  seen  used  in 
this  connection,  but  we  need  not  use  it  in  any  other  sense 
than  that  defined  by  the  best  dictionaries.  The  Century 
Dictionary  defines  Concede :  "To  grant,  as  a  right  or  privi- 
lege; yield  up;  allow."     It  defines  Concession:  "The  thing 

83 


84  RIGHT  AND  RICHES 

yielded ;  a  grant ;  specifically  applied  to  grants  of  land,  privi- 
leges or  immunities  made  by  government  to  individuals  or 
companies." 

"Concession"  or  "Concessions"  include  grants  of  land, 
by  special  enactment  as  a  bonus  to  encourage  the  undertak- 
ing of  an  enterprise  presumed  to  be  of  public  benefit;  pat- 
ents to  land  under  a  general  law ;  franchises  permitting  the 
carrying  on  of  certain  kinds  of  business.  Franchises  may 
or  may  not  include  the  use  of  public  streets,  roads,  or  other 
spaces,  but  may  depend  on  certain  favor  or  patronage.  All 
the  above  "Concessions"  are  definitely  warranted  or  granted 
by  direct  assent  of  government.  Besides  these  there  are  vast 
millions  of  dollars'  worth  of  Concessions  which  are  by  "com- 
mon consent." 

The  Century  further  defines  Concede:  "To  admit  as 
true,  just  or  proper;  to  acquiesce  in  by  silent  acceptance." 
This  class  of  concession  is  of  vastly  greater  importance  than 
is  usually  perceived. 

It  is  habitual  to  concede  important  privileges  to  persons 
simply  because  they  have  become  established  in  their  enjoy- 
ment. 

For  example :  Preferment  in  politics  is  often  given  to  old 
citizens,  or  to  descendants  or  relatives  of  those  who  former- 
ly enjoyed  some  privilege.  Often  this  seems  to  result  from 
the  strange  phenomenon  of  thought  observed  by  Benjamin 
Franklin,  that  when  one  has  once  accommodated  or  be- 
friended a  person  there  is  a  greater  incentive  to  do  so  again. 
Castes  rest  on  this  strange  influence. 

Again,  courts  recognize  title  by  use.  One  may  include 
an  area  of  another's  land  in  his  enclosure  for  a  certain  length 
of  time  and  acquire  title  thereby,  or  allow  use  of  land  for  a 
road  and  lose  title  to  it. 

Hence,  concession  is  first  by  acquiescence  of  the  people 
and  second  by  grant  of  government. 


CONCESSION  85 

Acquiescence  is  the  usual  basis  of  authority.  The  power 
and  domination  of  big  corporations  are  greatly  magnified. 
Trusts  rest  principally  on  the  cowardice  of  the  individual. 
The  most  ardent  democrats  will  usually  take  off  their  hats  to 
royalty.  The  enslaved  masses  are  fettered  by  their  fears  of 
their  supposed  masters.  They  are  made  slaves  by  their 
acquiescence.  If  you  can  arouse  in  any  class  of  oppressed 
humanity  the  incentive  to  be  free,  and  get  them  to  investi- 
gate, they  will  find  their  oppressors  have  no  power  save  that 
conceded  by  the  oppressed.  Political  bosses  rule  by  this 
common  acquiescence.  This  is  a  principle  of  economics 
more  important  than  is  at  first  apparent.  Therefore,  "Know 
the  truth  and  the  truth  shall  make  you  free." 

Current  works  on  economics  treat  Land,  Labor,  and 
Capital  as  the  three  recipients  of  output.  They  say  that 
Land  receives  Rents ;  Labor,  Wages ;  Capital,  Interest.  As 
so  considered.  Rent,  Wages  and  Interest  embrace  the  whole 
product.  For  the  purpose  of  comparison  we  shall  call  the 
share  received  by  Concession  for  access  to  the  opportunities 
it  dominates  either  "Rent,"  or  "Accessage."  "Accessage," 
or  "Rent,"  as  here  used,  shall  include  what  is  commonly 
covered  by  the  economic  meaning  of  rent,  and  in  addition, 
that  vast  revenue  commanded  by  concession  other  than  land. 

The  most  important  form  of  monopoly  is  land ;  that  is, 
the  surface  of  the  soil  and  the  deposits  upon  or  beneath  it. 
The  next  in  importance  are  franchises  for  railroads,  tele- 
graph, gas,  electric,  and  other  service  corporations,  having 
permission  to  use  public  space  or  having  eminent  domain. 

Then  there  are  such  companies  as  banks,  which  enjoy 
the  privilege  of  issuing  currency,  and  other  concerns  enjoy- 
ing special  privileges,  patronage,  subsidies  or  immunities. 
Much  valuable  property  rests  upon  the  monopoly  enjoyed 
by  concerns  which  perform  a  function  which  is  a  unit  by  its 
very  nature,  but  not  having  any  franchise,  as  commonly 
meant,  such  as  the  telegraph,  express,  sleeping  cars,  asso- 


86  RIGHT  AND  RICHES 

ciated  press,  etc.  There  is  a  tendency  in  this  direction  by 
ice,  milk  and  many  other  businesses  of  supply.  The  con- 
centration of  certain  lines  of  business  into  a  unit  or  monop- 
oly is  as  natural  as  gravitation. 

Production  is  the  result  of  Capital  and  Labor  applied  to 
preparing  and  marketing  natural  resources.  But  production 
can  scarcely  begin  before  it  meets  a  hindrance  to  the  use  of 
these  resources.  The  producer  finds  that  he  has  been  pre-' 
ceded  by  those  who  have  laid  claim  to  the  native  resources 
he  must  use  and  with  whom  he  must  make  terms.  The 
fertile  land,  the  mine,  the  forest,  the  best  positions  along 
the  trail  and  near  the  water  supply  are  early  appropriated. 

As  towns  and  cities  advance,  these  claimants  vadvance 
their  demands.  Society,  with  its  weakness  for  acquiescing 
in  WHAT  IS,  has  generally  conceded  even  the  most  un- 
reasonable of  these  claims  and  confirmed  them  by  grant  or 
CESSION,  thus  giving  to  a  few  what  is  the  birthright  of 
all. 

When  Robinson  Crusoe  was  alone  on  his  island,  every 
tree,  shrub,  plant,  animal  or  stone  was  rightfully  his  for 
his  exclusive  use.  But  had  another  party  of,  say,  ten  persons 
been  cast  on  the  island  as  he  was,  could  he  still  have  right- 
fully claimed  everything  to  their  exclusion?  No.  His 
stockade  and  bungalow  and  any  other  of  his  productions 
should  have  still  been  his.  A  small  child  could  answer  that 
question.  But  the  harbor,  land,  trees,  rocks  and  streams 
were  as  much  for  the  use  of  the  new-comers  as  for  him  ;  and 
it  would  be  a  stranee  party  with  superior  force  that  should 
not  compel  him  to  share  them. 

But  suppose  another  addition  of  89  people,  making  a 
hundred  in  all,  should  their  rights  be  less? 

Suppose  then  that  they  apportion  the  island,  alloting  to 
each  a  certain  tract.  Now  when  another  person  arrives 
what  shall  his  rights  be?  Why  not  just  the  same  as  that  of 
all  the  first  hundred? 


CONCESSION  87 

To  whom  does  Boston  Common  belong?  To  those  in- 
dividuals who  landed  on  Plymouth  Rock,  and  died  centuries 
ago?  No,  to  every  inhabitant  or  visitor  of  Boston  when- 
ever or  wherever  born.  To  whom  does  Yosemite  belong? 
To  whom  does  New  York  City  rightfully  belong?  To 
every  American,  native  or  adopted ;  to  Society,  and  society 
does  not  mean  part  of  the  people,  but  all  of  the  people  at 
all  times. 

Concession  consists  of  access  to  all  or  certain  resources 
in  a  given  territory  to  the  total  or  partial  exclusion  of  others. 
It  may  extend  in  scope  over  an  acre  or  less,  or  over  a  State. 
That  class  called  land  title  usually  carries  the  exclusive 
right  to  all  the  resources  of  certain  land  for  all  time.  Fran- 
chises are  usually  limited  to  the  marketing  of  a  certain  kind 
of  supply  and  are  limited  in  time.  Patents  are  only  for  the 
control  of  newly  devised  articles.  They  cover  the  whole 
country  and  are  limited  in  time.  Trusts,  by  combinations 
of  advantages,  control  the  market  for  certain  utilities. 

Output  is  divided  between  three  takers :  Concession, 
Capital  and  Labor.  Concession  charging  access ;  capital, 
interest;  and  labor,  wages.  Not  according  as  they  promote 
output,  for  there  are  but  two  factors  to  production — Labor 
and  Capital.  Concession  does  nothing  to  promote  or  cause 
output,  yet  it  would  be  master  in  the  division  and  have 
Labor  and  Capital  take  its  terms. 

It  is  common  for  economists  to  class  Land,  Labor  and 
Capital  as  the  factors  of  Production,  saying  that  for  pro- 
duction land  gets  rent ;  labor,  wages,  and  capital,  interest. 

This  is  confusing  and  misleading. 

Rent  is  never  paid  to  land  but  to  a  landlord,  nor  do 
landlords  as  such  in  any  degree  aid  production ;  as  laborers 
they  may,  or  as  capitalists. 

The  only  intelligent  statement  of  production  is  to  limit 
it  to  two  factors,  labor  and  capital. 

6— 


88  RIGHT  AND  RICHES 

Value;  Emanation. 

Value  or  property  emanation  is  not  production.  The 
very  entity  of  property  is  price,  while  the  ultimate  of  pro- 
duction is  satisfaction.  Price  hinders  instead  of  helping 
satisfaction. 

Even  as  a  factor  of  price-promotion  "land"  as  soil, 
mine,  or  forest,  is  not  certainly  meant  by  such  econ- 
omists, but  its  owner,  who  draws  rent.  Sunshine  aids 
production  quite  as  much  as  land,  yet  it  does  not  take  a 
share  of  the  crop.  Owners  of  land  by  charging  access  do 
indeed  enhance  the  cost,  or  hindrance  to  getting  such  things, 
with  the  result  of  greater  price  to  the  consumer.  In  truth 
the  whole  value  of  output  in  specific  cases  may  rest  on  the 
landlord's  charge.  This  does  not  make  it  his  product.  It 
simply  gives  the  product  value  because  it  restricts  it. 

He  simply  takes  the  whole  natural  growth  as  his  rent, 
as  his  advantage  of  access  to  the  land,  his  access  fee.  Now 
when  we  give  a  definite  meaning  to  "Production,"  we  elim- 
inate the  "concession  man"  from  it  as  a  factor.  We  then 
have  two  persons,  the  laborer  and  capitalist,  producing  from 
natural  resources.  Yet  the  product  must  be  shared  with  a 
third  person  for  simply  being  master  of  such  resources.  In 
practice  the  holder  of  concession  often  furnishes  the  capital 
required  in  production;  in  some  instances  he  uses  his  own 
labor,  but  in  this  country  to-day,  perhaps  more  than  half  the 
output  is  taken  by  those  who  simply  own  the  concession.  In 
most  cases  they  neither  work,  furnish  capital,  nor  even 
superintend.  Hundreds  of  millions  are  added  to  the  cost  of 
farm  products  as  rent  for  lands ;  to  the  cost  of  merchandise 
by  rent  of  business  sites.  Occupants  of  city  apartments  pay 
landlords  seldom  or  never  seen. 

The  Analysis  of  Property  is  as  follows: 
Desire  X  Hindrancer=Value=Property . 
Hindrance^Accessage  paid   concession-|-Reward    paid 
for  production. 


CONCESSION  89 

Re  ward=Wages  -(-  Interest. 

That  is,  the  three  hindrances  to  output,  wages,  interest 
and  rent,  by  limiting  the  supply,  maintain  the  value  of 
wealth.  They  constitute  the  Consumer's  Cost.  The  con- 
sumer either  directly,  or  through  dealers  and  exchange,  must 
ever  pay  the  sum  of  these  three  elements  of  cost,  or  hin- 
drance to  supply. 

The  Essence  of  property  is  mental. 

Value  is  not  in  any  degree  in  proportion  to  any  material 
element,  but  is  wholly  dependent  on  desire  and  hindrance — 
"sought-afterness"  and  restriction,  and  the  measure  of  the 
value  is  the  measure  of  the  property.  So  much  value"  is  so 
much  property,  the  property  being  not  the  goods  but  the 
value  of  them.  The  property,  or  value  manifested,  in  any 
quantity  of  goods  is  subject  to  the  above  analysis.  Like 
the  mercury  in  the  thermometer  value  rises  and  falls,  not 
from  a  force  within  things,  but  from  a  force  without,  the 
change  of  mental  estimates  of  demand  and  ofifering. 

But  on  the  average  the  value  of  commodities  is  their 
cost  of  output — the  reward  of  production  plus  accessage; 
as  on  the  average  they  may  not  be  had  cheaper,  and  no 
greater  cost  will  continuously  be  incurred  than  consumers 
will  consent  to  pay.  Consumers  desire  not  coal  but  heat. 
Coal  is  one  means  of  supply.  The  Hindrance  or  cost  of 
coal  is  the  accessage  paid  to  owners  of  coal  land  and  rail- 
roads, plus  the  producers'  reward — the  wages  paid  workers 
at  mining  and  transporting,  and  the  interest  due  for  equip- 
ment of  mine  and  carrier.  These  two  constituents  of  re- 
striction, accessage  and  reward,  in  varying  proportions, 
comprise  the  cost  of  all  wealth. 

Taking  for  example  a  bushel  of  wheat,  of  what  is  its 
value  or  cost  made  up?  Its  cost  is  the  rent,  perhaps  half, 
and  the  grower's  reward,  half;  or  a  city  home,  the  lot  is 
perhaps  forty  per  cent,  and  the  house  sixty.     Of  the  price 


90  RIGHT  AND  RICHES 

of  the  house,  maybe  thirty  per  cent,  is  accessage  to  owners 
of  forests,  etc. 

Now  we  must  all  admit  the  justice  of  rewarding  those 
whose  efforts  have  cared  for  the  crop  or  fashioned  the 
fabric  for  our  use,  but  when  we  buy  we  must  pay,  not  alone 
this  reward,  but  added  thereto  the  charge  of  them  who  have 
contributed  nothing  at  all,  but  have  impeded  all  output  until 
they  were  paid  toll.  Though  concession's  revenues  are  with- 
out one  scintilla  of  justification,  yet  the  earned  wealth  that 
is  taken  as  arbitrary  charges  is  past  comprehension.  Con- 
sider that  owners  of  all  our  coal,  iron,  lead,  copper  and 
precious  metal  mines ;  all  our  agricultural  land,  oil  wells  and 
public  service  franchises  are  absorbing  the  enormous  rev- 
enues which  sustain  their  values,  and  returning  practically 
no  compensation  to  producers  and  society  who  confers  them. 

No  one  can  get  the  smallest  amount  of  property  without 
either  earning  it  or  taking  it  from  others. 

But  we  hear  it  argued  that  the  owner  was  early  to  get 
such  well  located  lot  before  the  city  grew.  He  should  reap 
the  reward  of  waiting;  yet  have  we  not,  everyone,  ivaited 
since  we  were  born? 

Nothing  has  less  merit  than  priority.  If  I  am  first  out 
on  the  street  in  the  morning,  should  all  turn  aside  for  me? 
Is  there  even  any  justice  that  he  who  rides  in  a  street  car 
from  the  terminus  should  get  a  seat,  while  he  who  gets  on 
in  the  middle  of  the  line  should  stand,  though  he  pay  as 
much?  A  reserved  seat  is  sold  at  a  theater,  on  just  prin- 
ciples.    "First  come  first  served"  is  a  rule  without  equity. 

The  farce  of  the  superior  rights  of  the  old  citizen,  in 
politics,  and  preferment  in  general,  is  founded  on  the  same 
false  sentiment.  It  is  a  well-known  fact  that  the  later 
comers  into  a  community  are  the  ones  who  put  life  into  it. 
When  the  mails  came  in  the  spring  to  Alaska,  people  would 
stand  in  line  for  hours  and  hours  waiting.  Twenty,  forty, 
fifty  dollars  would  be  paid  for  a  place  near  the  head  of  the 


CONCESSION  91 

line.  So  we  have,  and  so  we  will  have,  scrambles  for  wealth 
where  priority  is  its  price.  But  the  man  in  the  front  of  the 
line  has  done  nothing  to  entitle  him  to  preference.  Should 
another  door  be  opened  and  the  line  reversed  no  injustice 
would  really  be  done. 

There  is  no  justice  in  the  rushes  permitted  to  be  made 
for  land  in  opening  new  districts  by  the  Government.  Some- 
one hurrying  to  be  first  does  the  public,  whose  the  land  is, 
no  good.  Should  a  mob  break  into  a  store  and  carry  ofif 
the  goods  the  front  fellow  would  be  not  less  a  thief  than 
those  behind  him.  Plainly  to  make  people  race  for  native 
resources  is  not  intilligent.  What  value  they  have  belongs 
to  the  public,  and  the  puljlic  should  receive  a  full  compen- 
sation, and  so  with  franchises. 

Busses  are  run  in  a  street ;  the  right  of  way  is  free  to 
all,  but  some  one  of  intelligence  says :  "Let's  lay  rails  and 
put  on  cars  and  run  them  by  electricity  and  carry  people 
more  cheaply,  easily  and  comfortably."  Yes,  but  who  is 
going  to  get  the  privilege  to  do  it?  Every  one  may  not 
have  tracks  on  the  same  street  as  they  had  busses.  So  they 
go  before  the  council  and  he  who  can  use  the  biggest  "per- 
suasion" gets  the  franchise.  Now  it  is  not  wrong  to  have 
cars  on  the  streets,  but  this  way  of  deciding  who  is  to  do  it 
is  wrong.  The  franchise  is  of  value  to  the  public,  and  the 
public  should  receive  its  Natural  Rent.  When  the  public 
gets  none  it  is  robbed. 


CHAPTER  II. 
"Living"  Rates  of  Interest  and  Wages. 

NDER  the  individualistic  system,  three  recipients, 
Capital,  Labor  and  Concession,  take  all  of  output. 
They  do  not  all  share  in  every  instance.  Some- 
times there  is  output  without  rent,  sometimes 
without  capital's  use,  sometimes  without  labor,  sometimes, 
indeed,  without  either  labor  or  capital.  Grass  grows  with- 
out labor  or  capital,  and  is  sold  standing.  Again  the  most 
inestimable  services  often  require  neither  capital  nor  con- 
cession. 

Rent  or  accessage  is  that  profit  or  income  accruing  from 
the  control  of  land  or  other  natural  or  social  resource. 

Rent  is  not  limited  to  a  periodical  payment  in  money  or 
goods  made  by  renter  to  owner,  but  consists  as  well  in  the 
profit  income  or  advantage  secured,  by  the  owner's  use  of 
his  own  land. 

Wages  are  not  limited  to  the  narrow  meaning  of  money 
paid  to  someone  hired.  Wages  are  any  reward,  however 
received,  for  active  human  exertion,  applied  to  production 
or  service.  Under  the  most  savage  conditions  they  in- 
clude the  whole  output.  The  primitive  hunter  gets  all  the 
game  as  his  wages ;  the  miner  all  the  gold  he  washes  as  his 
wages ;  the  pioneer  gets  all  the  wood  he  cuts  from  the  wild 
woods  as  his  wages,  all  the  crop  he  grows  on  the  free  land 
vmtil  the  land  assumes  value  and  has  ownership,  or  until 
equipment  is  used  of  enough  value  that  the  interest  on  it  is 
worth  considering. 

Interest  is  that  part  of  wealth's  increase  zvhich  is  given 
as  a  reivard  for  deferring  its  enjoyment,  whether  paid  to  its 
possessor  or  to  its  lender. 

92 


"LIVING"  RATES  OF  INTEREST  AND  RICHES       93 

Manifestly,  one  person  may  derive  his  income  from  one, 
two,  or  all  these  sources  combined.  He  may  labor  on  his 
own  land  and  use  his  own  capital. 

Under  the  economic  meaning  of  wages,  the  salary  of  the 
railroad  president  is  as  much  wages  as  that  of  the  section 
man.  The  earnings  of  the  greatest  architect,  chemist, 
painter,  musician  or  actor  are  his  wages.  The  owner  of  a 
great  factory  may  derive  his  income: 

First,  from  the  advantage  which  the  ownership  of  the 
site  gives — rent. 

Second,  from  the  benefits  of  his  work  of  superintending 
it — wages ;  and 

Third,  from  the  increase  accruing  to  the  capital  repre- 
sented in  the  building,  machinery,  stock  being  finished,  etc. 
— interest. 

Sometimes  the  whole  product  goes  to  Labor  as  wages, 
or  to  capital  as  interest,  or  to  concession  as  accessage,  but 
most  commonly  they  all  share  in  some  degree. 

Now  what  are  the  laws  which  determine  the  share  which 
each  shall  receive?  Is  there  a  scientific  determination  of 
this  important  question?  If  not,  there  can  be  no  Science  of 
Economics.  Many  theories  have  been  advanced  and  have 
gained  more  or  less  adherents,  but  let  us  see  if  these  are 
universal  laws.  We  shall  use  the  terms  Rent  and  Acces- 
sage, and  the  terms  Concession  and  Land,  as  synonymous. 

Let  us  first  seek  the  law  of  Rent  or  Accessage.  Rent  is 
a  charge  for  the  use  or  advantage  of  land  or  other  oppor- 
tunity ;  land  being  the  most  simple  or  concrete  form  of  such 
opportunities.  Its  possession  must  always  give  some  ad- 
vantage before  rent  can  be  charged.  A  business  lot  in  the 
heart  of  a  metropolis  may  be  worth  to  the  user  $1.00  per 
square  foot  a  month,  but  as  we  go  down  the  scale  of  busi- 
ness lots,  we  finally  come  to  a  grade  which  will  only  be 
used  when  rent-free.    So  in  agricultural  land,  some  is  worth 


94  RIGHT  AND  RICHES 

$20.00  per  acre  or  more  rent,  but  a  lower  grade,  by  reason 
of  remoteness  from  centers,  etc.,  will  only  be  used  rent-free. 

Land  of  such  value  as  to  be  used  when  rent-free,  but 
for  which  no  rent  at  all  will  be  paid,  is  said  to  be  at  the 
"margin  of  rent."  That  is,  the  worker  believes  that  the  out- 
put will  give  him  wages,  but  not  enough  more  to  pay  any 
rent.  If  one  cannot  make  an  output  on  land  which  will  ex- 
ceed in  value  the  wages  and  interest  he  may  otherwise  make, 
he  will  not  pay  any  rent  for  it.  If  he  can  make  twice  the 
amount  of  such  wages  and  interest,  he  will  probably  give 
half  the  output  as  rent.  Hence  we  have  deduced  the  follow- 
ing law  of  rent: 

The  rent  which  will  he  given  for  a  piece  of  land  is  equal 
to  zvhat  the  output  from  it  exceeds  the  current  rates  of  zvages 
and  interest  for  the  quantity  of  labor  and  capital  used. 

An  intelligent  merchant  is  guided  by  this  law.  If  he  is 
offered  one  store  rjDom  rent-free  and  another  at  $1,000  per 
month,  he  will  take  the  latter  if  he  considers  he  can  make 
$1,100  more  in  it.  A  manufacturer  will  not  take  as  a  bonus 
from  one  city  a  budding  rent-free,  if  he  can  pay  $10,000 
rent  in  another  city,  and  make  $11,000  more.  This  law 
variously  stated  is  commonly  acted  upon. 

There  are  many  very  mistaken  theories  about  rent, 
pretty  generally  held  amongst  real  estate  men  and  investors, 
and  one  is  that  rent  and  the  consequent  value  of  property  in 
various  cities  is  commensurate  with  the  population.  An- 
other basis  of  figuring  is  on  the  business  of  the  city.  Neither 
is  in  any  degree  to  be  relied  upon.  Prices  of  property  and 
rates  of  rent  in  a  city  are  more  or  less  arbitrary,  and  de- 
pend principally  upon  the  understood  or  tacit  agreement 
among  owners  to  make  them  high,  and  the  degree  of  resist- 
ance on  the  part  of  tenants.  Property  is  more  likely  to  be 
hieh  in  a  city  where  it  is  largely  held  by  prosperous  people. 
In  cities  where  the  lots  are  large  with  each  residence,  they 
may  not  be  higher  in  price  than  small  lots,  where  lots  are 


"LIVING"  RATES  OF  INTEREST  AND  RICHES       95 

generally  small.  Other  things  being  equal,  the  rate  of  rent 
in  a  city  is  proportionate  to  the  local  expenditures  of  its  citi- 
zens, or  broadly,  to  their  standard  of  subsistence.  The 
prosperity  of  a  city  depends  not  upon  the  native  abundance 
of  material  resources  near  it  but  upon  the  right  thinking  of 
its  citizens. 

High  interest,  while  wages  are  yet  low,  means  that  labor 
will  be  diverted  from  producing  wealth  for  consumption  to 
producing  wealth  for  capital  until  an  equilibrium  is  reached 
between  wages  and  interest.  High  wages  while  interest  is 
still  low,  means  that  labor  will  make  little  new  capital  while 
old  may  be  used,  but  will  be  employed  at  producing  wealth 
for  enjoyment,  and  that  laborers  will  become  consumers  of 
wealth  more  largely,  thus  tending  to  lessen  the  portion  avail- 
able for  capital;  that  there  will  be  greater  demand  for  cap- 
ital to  be  employed  in  conjunction  with  greater  demand  for 
labor  in  production,  which  will  tend  to  increase  interest 
rates.  Low  rates  for  interest  means  slack  industry;  means 
that  little  labor  will  be  employed  in  producing  new  supplies 
of  capital.  Every  laborer  getting  good  wages  may  partici- 
pate in  the  benefit  of  high  interest  rates  by  saving  and  in- 
vesting. Not  so  with  accessage.  The  gas  works,  the  tele- 
graph, the  railroad,  the  express  company,  may  increase  their 
profits  while  both  interest  and  wages  are  lowering. 

It  must  not  be  forgotten  that  wages  mean  not  alone  the 
stipend  paid  by  employers,  but  the  part  of  the  output  re- 
ceived by  those  who  are  their  own  employers.  Some  seem 
to  think  that  high  wages  tend  to  limit  output,  but  when 
wages  are  so  high  that  employers  might  somewhat  cut  down 
the  number  of  employes,  will  not  products  be  in  such  de- 
mand that  laborers  may  employ  themselves  ?  History  shows 
that  the  greatest  output  is  coincident  with  the  highest  in- 
terest and  wages.  But  if  rents  get  too  high,  production  con- 
tracts. Too  high  rents — all  rents,  tend  to  lessen  output. 
This  does  not  imply  that  high  interest  and  wages  always 


96  RIGHT  AND  RICHES 

tend  to  lessen  the  income  from  land  or  other  concession.  A 
large  production  means  more  to  divide,  and  all  parties  to  the 
division  may  receive  more.  But  when  excessive  rents  ab- 
sorb and  consume,  so  as  to  stop  industry ;  when  that  which 
replenishes  capital  is  wasted ;  when  the  ultimatum  of  labor 
is  refused,  rent  also  drops. 

Labor  and  Capital,  being  the  productive  factors,  are 
partners  in  the  sharing  of  output,  as  Henry  George  has 
rightly  stated.  Here,  however,  we  must  begin  to  disagree 
with  George's  teachings,  for  they  proceed  to  fix  a  certain 
share  as  rent,  and  then  compute  the  joint  share,  the  Reward 
of  Production,  by  deducting  rent  from  the  whole  product. 
We  shall  proceed  to  determine  the  shares  of  Interest  and 
Wages  separately,  and  then  find  the  share  of  rent  by  sub- 
tracting their  sum  from  the  total  output.  Let  us  first  as- 
certain the  share  of  labor. 

The  law  of  Wages  is : 

The  minimum  wage  in  a  given  community  is  that  rate 
below  zvhich  workers  will  refuse  to  produce. 

This  refusal  depends  principally  on  what  it  takes  to 
maintain  the  standard  of  living  that  has  become  usual  to  the 
various  classes  of  workers  in  that  community. 

The  law  of  Interest  is  like  unto  that  of  wages : 
The  minimum  Interest  rate  is  that  below  zvhich  those  ac- 
quiring zuealth  zvill  refuse  to  save  and  devote  it  to  repro- 
ductive use. 

This  refusal  is  also  based  somewhat  on  the  standard  of 
living  usual  in  the  community.  For  people  with  small  in- 
comes will,  in  one  community,  be  content  with  meagre  sub- 
sistence while  they  save  for  a  low  rate,  simply  because  such 
standard  of  subsistence  is  common  among  their  class  there ; 
while  in  another  place  it  would  take  double  the  rate  to  in- 
duce them  to  dispense  with  the  more  costly  living  which  is 
there  common. 


"LIVING"  RATES  OF  INTEREST  AND  RICHES       97 

We  have  now  determined  both  Wages  and  Interest  to 
be  founded  upon  refusal  to  take  less,  and  having  determined 
them,  we  may  now  ascertain  what  is  the  share  of  rent,  by 
deducting  this  sum  from  the  total  output. 

The  share  of  Rent  is: 

What  is  left  after  paying  wages  and  interest. 

Let  us  try  these  rules  on  a  practical  problem — to  culti- 
vate a  certain  piece  'jf  land  requires  ten  workers  and  $10,000 
capital.  With  interest  at  6%,  and  wages  at  $1.50  per  day, 
the  output  will  pay  such  Wages  and  Interest  and  leave,  we 
will  say,  half  the  output  for  rent.  But  if  there  is  such  in- 
crease of  wages  and  interest  as  to  add  50%  to  the  total  Re- 
ward of  Production,  then  but  one- fourth  of  the  output  will 
be  given  for  rent.  And  if  the  Reward  of  Production  should 
double,  such  land  would  bring  no  rent. 

Hence,  it  follows  that  the  "Margin  of  rent"  is  zvhere 
Labor  and  Capital  will  refuse  to  operate  for  less  than  all  the 
output. 

Now  George,  so  logical  in  most  of  his  reasoning,  here 
falls  into  the  greatest  error.  He  determines  the  rent  of  land 
to  be  that  amount  by  which  the  output  exceeds  that  of  land 
at  the  "Margin  of  rent,"  just  as  we  do,  but  he  fails  ever  to 
determine  his  "Margin  of  rent."  For  his  only  definition  of 
the  "Margin  of  rent"  is  where  land  will  pay  no  more  than 
the  Reward  of  Production,  and  his  Reward  of  Production  is 
the  whole  output  at  the  "Margin  of  rent."  Hence,  he  is  but 
reasoning  in  a  circle. 

He  does  indeed  say  that  the  "Margin  of  rent"  is  "where 
land  may  be  had  by  producers  free  of  rent,"  but  is  it  not 
plainly  obvious  that  no  land  may  ever  be  had  free  of  rent 
except  simply  such  as  will  produce  no  more  than  the  Pro- 
ducers' Reward?  George  determines  Wages  and  Interest, 
this  Producers'  Reward,  for  the  whole  community,  to  be  no 
more  than  can  be  made  on  this  free  land,  this  "no-man's- 


98  RIGHT  AND  RICHES 

land,"   lying  loose   In   the  commons.      What   a  meagre  re- 
ward !     It  is  only  that  of  the  Indian. 

Further,  it  is  evident  that  in  actual  practice  such  land 
may  seldom  be  had  free,  as  it  is  taken  up  by  speculators 
long  before  it  is  worth  working.  Nor  can  anything  but 
remote  relations  be  traced  between  wages  in  congested  cen- 
ters, and  distant  places  where  land  is  free.  Wages  in  St. 
Louis  may  average  $2.00  per  day,  while  but  30  cents-  can 
be  made  on  the  nearest  free  land.  This  "Margin  of  rent," 
which  under  the  present  status  of  industry  marks  the  rates 
of  "Living"  wages  and  interest  has  no  relation  to  "free"  or 
unappropriated  land,  has,  in  fact,  no  relation  whatever  to 
land  ozmiership,  but  to  the  accustomed  standard  of  living. 
The  "Margin  of  rent"  refers  to  a  condition  of  thought,  and 
not  to  areas  or  locations,  not  to  some  hypothetical  grade  of 
land  which  remains  "uncornered." 

This  doctrine  of  George's  is  not  only  unscientific,  but 
fatalistic.  It  is  the  weakest  point  in  the  logic  of  this  great 
man.  It  presumes  an  absolute  authority  and  power  in  the 
hands  of  Concession  Holders,  which,  like  the  laws  of  the 
Medes  and  Persians,  cannot  be  gainsaid,  instead  of  attrib- 
uting to  them  only  such  power  as  is  conceded  them. 

Correct  Reasoning  Hopeful. 

Education  has  created  the  widespread  desire  for  wealth 
among  us.  Education  increases  desire  as  well  as  produc- 
tion. Education  .extends  in  many  directions — in  habits, 
tastes  and  appreciation.  Educate  the  natives  of  Congo  and 
how  rich  they  will  iDecome.  Education  is  real  or  imaginary. 
We  are  getting  some  of  the  real  kind.  Much  of  the  kind 
which  has  been  called  education  was  not  education,  but  the 
worship  of  dead  relics  of  a  dead  past.  We  want  live  edu- 
cation— a  knowledge  of  principles — that  does  not  wait  when 
something  good  is  proposed  to  be  done,  to  ask :  "Has  it 
been  done  before?"    "What  did  Caesar  do?"    The  new  kind 


"LIVING"  RATES  OF  INTEREST  AND  RICHES       90 

of  education  will  not  consult  the  attorneys  of  hereditary  in- 
terest. Real  education  teaches  of  the  Truth,  "which  is  the 
same  yesterday,  to-day  and  forever." 

Neither  destitution  nor  starvation  can  subjuj^ate  men 
who  knozv  their  rifjhts  and  have  brotherliness  enough  to 
stand  together  to  maintain  them. 

"Poverty"  has  indeed  followed  "Progress." 

What  is  the  remedy? 

More  progress. 

Men  were  not  constituted  to  exist  isolated  in  the  wilder- 
ness. The  are  brothers.  When  civilization  shall  have  be- 
come enough  civilized,  men  will  be  brave  in  the  fraternal  de- 
mand for  what  is  their  own. 

The  resort  to  free  land  is  but  one  of  the  least  important 
alternatives  of  labor  and  capital.  This  is  not  denying  the 
good  effect  of  the  extension  of  the  area  of  production.  The 
irrigation  of  the  arid  lands  now  progressing,  means  much. 
The  drainage  of  swamps  soon  to  be  comprehensively  started 
will  mean  a  great  deal  more.  It  raises  the  standard  of  living, 
and  so  raises  wages  i-.nd  interest. 

Greed  is  the  greatest  enemy  of  progress,  but  greed  is  not 
confined  solely  to  the  opulent.  If  all  those  who  have  one 
talent  would  not  bury  it,  but  would  use  it  for  humanity,  the 
millennium  would  soon  come. 

The  true  statement  of  the  laws  of  Output's  division  gives 
hope.  It  puts  the  responsibility  for  wages  on  the  workers. 
As  they  improve  themselves,  their  wages  will  improve.  In 
proportion  as  laborers  as  a  class  improve  themselves  moral- 
ly and  intellectually,  their  condition  will  improve ;  for  with 
this  moral  and  intellectual  improvement  will  come  an  in- 
crease of  self-respect  and  independence  which  will  raise  their 
standard  of  living.  When  laborers  put  aside  low  ideals  of 
value,  that  of  spending  for  drink  and  other  evil  habits,  or 
for  sordid  selfishness,  there  will  follow  better  ideas  of  justice 
and  fairness.     "They  will  know  their  rights  and  knowing 


100  RIGHT  AND  RICHES 

dare  maintain."  While  greed  continues  the  motive  of  ef- 
fort, while  men  covet  wealth  that  they  in  turn  may  dom- 
inate others,  they  shall  themselves  suffer  from  greed;  for 
the  "propertyless"  class  have  the  same  lack  of  appreciation 
as  have  the  rich,  that  the  true  value  of  wealth  is  the  good 
we  may  do  with  it.  What  share  of  the  product  labor  will 
accept  depends  on  the  laborers'  incentive  for  a  larger  and 
better  use  of  wealth,  and  their  power  to  demand  it. 

If  workers  and  conservators  of  useful  wealth  may  re- 
fuse less  than  a  certain  share  of  output,  they  are  not  then 
entirely  helpless  under  Concession's  demand  for  tribute. 
One  evidence  that  producers  have  this  power  to  refuse  is 
manifested  in  strikes.  No  one  will  deny  the  energy  dis- 
played in  strikes  even  though  they  doubt  their  wisdom. 
"Proprietorism"  has  come  to  recognize  their  force,  even 
though  it  disputes  their  justice  or  wisdom. 

Labor  strikes  are  too  familiar  to  all  to  require  comment, 
but  Capital  strikes,  though  far  more  widespread  in  their  dis- 
astrous results,  are  as  yet  a  force  generally  unrecognized 
and  misunderstood.  Their  dire  effects  are  well  known  to 
all,  but  the  attempts  of  popular  "doctors  of  commerce"  to 
diagnose  them  have  been  as  erroneous  as  it  would  be  to  take 
indigestion  to  be  measles.  However  much  we  may  deplore 
strikes,  it  nevertheless  remains  a  fact  that  the  present  meas- 
ure of  wages  and  interest  is  determined  by  strikes. 

What  is  a  Capital  Strike;? 

In  order  to  answer  this  question  we  must  continually 
bear  in  mind  exactly  wdiat  capital  is,  and  what  true  interest 
is.  Capital  is  the  nutriment  of  Commerce,  and  we  must  not 
confuse  the  lack  of  nutriment  with  a  blood  disease.  Unless 
we  really  know  what  capital  is,  we  cannot  recognize  its 
functions  and  effects,  nor  the  source  from  which  it  comes ; 
then  how  can  we  expect  to  understand  the  real  nature  of 
these  periodic  hard  times  which  are  nothing  but  commer- 
cial malnutrition? 


"LIVING"  RATES  OF  INTEREST  AND  RICHES     101 

George's  misconception  of  the  basis  of  interest  clouded 
his  treatment  of  this  subject.  His  error,  that  interest  rests 
entirely  on  animal  and  vegetable  growth  and  increase,  mis- 
led him  to  the  conclusion,  that  the  prevailing  increase  giv- 
en by  capital  depended  on  the  amount  of  such  growth ;  that 
other  forms  of  capital  than  those  subject  to  such  growth,  by 
some  mysterious  means,  took  up  or  absorbed  a  share  of  this 
potency,  through  the  exchangeableness  of  wealth,  until  all 
capital  took  on  an  average  interest  potency.  In  other  words, 
his  theory  was  that  the  rate  or  percentage  of  increase  given 
by  capital  is  the  ratio  which  this  animal  and  vegetable  growth 
bears  to  the  whole  total  of  capital. 

This  theory  has  been  quite  generally  accepted,  perhaps 
because  it  is  so  vague  and  mysterious,  and  so  far  from  the 
simple  facts.  A  magazine  article  in  the  summer  of  1907 
laboriously  explained  the  apparent  shortage  of  capital  as 
occasioned  by  the  fact  that  manufactures  and  transportation 
interests  were  expanding  out  of  all  proportion  to  agricul- 
ture. But  pray,  what  are  transportation  and  manufactures 
but  means  to  make  products  of  the  soil  available?  What 
tends  more  to  such  products'  increase  than  the  facility  of 
transport  ? 

When  we  start  from  the  actual  cause  and  measure  of  in- 
terest we  miss  all  this  vague,  mysterious  reasoning. 

We  see  that  interest,  like  wages,  is  simply  a  compensa- 
tion for  reluctance.  That  increase  depends  no  more  on  ani- 
mal or  vegetable  growth  than  it  does  on  transportation  or 
education.  Every  species  of  wealth  that  facilitates  output 
gives  increase  as  much  as  does  a  herd  of  cattle,  or  field  of 
grain,  or  orchard  of  fruit.  Much  confusion  is  engendered 
by  the  "old  school"  proposition  that  "capital  employs  la- 
bor," and  the  declaration  of  later  writers  that  capital  only 
"adds  to  the  effectiveness  of  labor,"  or  that  "labor  employs 
capital."  As  well  might  we  say  that  "modern  plows  and 
reapers  add  to  the  effectiveness  of  horses,"  or  that  "horses 


102  RIGHT  AND  RICHES 

employ  reapers,  etc.,  in  agricultural  work,"  as  that  labor  em- 
ploys capital. 

The  real  essential  entity  of  both  Labor  and  Capital  con- 
sists alone  in  the  physical  expression  of  human  thought. 
Labor  and  Capital  are  equal  factors ;  neither  employs  the 
other.  Capital  is  often  employed  without  labor,  and  usually 
without  any  definite  ratio  to  the  labor  employed.  And  labor 
is  employed  without  any  certain  relation  to  capital.  The 
ownership  of  herds  increasing  on  the  free  public  domain 
made  many  rich  in  the  last  quarter  century.  The  whole  out- 
put was  practically  interest.  This  was  not  through  the  use 
of  capital  by  labor,  or  labor  by  capital.  The  labor  of  the 
cowboy  was  a  mere  incident.  The  cattle  simply  increased, 
and  the  increase  depended  on  how  many  the  owner  had  to 
begin  with,  and  how  few  he  disposed  of,  not  on  how  many 
cowboys  lie  had.  Much  language  is  wasted  and  much  mis- 
understanding caused  by  making  incidents  into  vital  fac- 
tors. The  definition  of  labor  cannot,  with  any  scientific 
sense,  be  made  to  include  the  laborer.  Labor  is  the  effective 
energy,  either  mental  or  muscular,  which  promotes  produc- 
tion. Th^  employment  of  capital  in  specific  cases  may  be  to 
entirely  dispense  with  labor.  We  may  intelligently  say  that 
industry  or  production  employs  labor  or  capital,  or  we  may 
say  that  some  person  employs  labor  and  capital.  He  may 
employ  his  own  labor  or  another's,  and  his  own  capital 
or  another's.  It  would  be  foolish  to  say  that  the  section- 
men's  labor  employed  the  capital  of  the  railroad,  or  even 
that  the  section-men  employed  it. 

The  correct  statement  is  that  capital  is  employed  by  pro- 
duction. The  old  school  proposition  that  laborers  depend 
for  opportunity  to  work,  or  at  least  to  work  effectively,  on 
the  existing  supply  of  capital,  and  that  their  employment  is 
limited  in  proportion  to  its  amount,  is  too  palpably  incorrect 
to  need  much  argument.  Capital  is  but  the  physical  means 
through  which  thought  is  applied  to  the  production  of  sup- 


"LIVING"  RATES  OF  INTEREST  AND  RICHES     103 

plies  or  service.  The  real  essential  entity  of  any  item  of  cap- 
ital from  a  production  standpoint — which  is  the  only  stand- 
point from  which  capital  may  be  truly  reckoned — is  not  its 
bulk,  weight,  cost,  density,  etc.,  but  its  productive  effective- 
ness, its  capacity  to  increase  the  sum  total  of  human  sup- 
plies. So  true  and  vital  is  this  conception  of  Capital  that 
we  should  try  to  divest  our  thoughts  of  all  other  false  con- 
ceptions. It  is  common  to  speak  of  improved  machines  as 
"inventions"  in  such  expressions  as  "there  is  a  new  inven- 
tion which  produces  many  times  the  results."  Is  not  a  wheel. 
a  plow,  a  steam  engine,  or  a  bridge  each  as  truly  an  "in- 
vention" or  idea  to-day  as  when  the  first  idea  of  it  was  put 
to  the  service  of  humanity  ? 

What  the  great  master,  Henry  George,  means  to  bring 
out,  is  that  laborers,  if  natural  resources  are  available,  may, 
by  their  work,  increase  capital  without  limit. 

Output  of  wealth  is  from  three  elements :  First,  re- 
sources— the  natural  material  substances  and  forces ;  sec- 
ond, labor — the  manipulation  of  these  natural  elements  by 
human  effort ;  third,  the  addition  of  sums  of  partly  devel- 
oped wealth — stock — to  the  natural  supplies — capital — and 
the  manipulation  of  these  "stocks"  by  artificially  contrived 
engines  or  means — more  capital. 

Hence,  a  small  sum  of  wealth  will  accrue  yearly  from 
land  spontaneously ;  a  considerably  greater  output  can  be 
made  to  accrue  by  human  hands  unaided  by  implements  of 
any  value  whatever ;  this  is  the  increase  given  by  labor ; 
but  with  the  addition  of  capital — reserved  stocks  and  equip- 
ment— the  output  can  be  increased  several  hundredfold. 
How  much  more  corn  can  be  grown  with  modern  imple- 
ments, than  with  a  clam  shell !  How  much  greater  com- 
merce is  possible  from  the  use  of  railroads  and  ships,  than 
could  be  carried  on  men's  backs  and  on  rafts !  It  is  idle  to 
call  this  increase  an  increased  power  of  labor,  for  it  is  not. 
Education  does  give  labor  increased  power,  but  this  is  some- 


104  RIGHT  AND  RICHES 

thing  very  different  from  capital,  for  the  most  educated 
labor  is  the  least  effective  without  capital  co-operate  with  it. 
There  is  an  exaggerated  notion  of  the  importance  of  labor 
as  a  creator  of  wealth.  It  is  more  scientifically  correct  to 
speak  of  production  as  the  disco7'cry  than  as  the  creation 
of  wealth.  We  should  learn  that  our  supply  depends  not 
on  how  hard  we  work,  but  how  rightly  we  think. 

The  increase  given  by  capital  is  perhaps  hundreds  of 
times  that  of  labor.  The  important  thing  to  distinguish  is 
that  only  a  fraction  of  this  increase  goes  to  capital-fur- 
nishers, as  interest.  A  considerable  part  of  it  goes  directly 
to  the  consumer  in  cheaper  wares  and  the  remainder  goes  to 
concession.  Legitimate  interest  is  always  drawn  from  the 
capital  increase^  but  its  amount  is  not  based  on  any  ratio  or 
percentage  to  such  increase. 

Wages  and  rent  both  are  also  principally  taken  from  this 
increase  which  capital  produces. 

Wages  to-day  with  us  are  many  times  the  increase  given 
by  labor.  The  real  increase  actually  given  by  labor  would 
only  support  wild  Indians. 

It  is  well  to  remember  that  the  part  of  output  taken  by 
either  recipient  is  not  in  any  sense  an  approximate  percent- 
age of  such  output.  Interest  is  a  percentage  of  the  capital 
devoted,  but  has  no  approximate  ratio  to  the  output  given. 
Wages  have  no  relation  to  output.  Wages  are  no  more 
where  the  results  per  worker  per  day  are  $1,000  than  where 
tkey  are  only  $3.00. 

George  says  that  abstention  is  but  a  negative  factor ;  that 
it  can  produce  nothing.  Quite  true,  but  we  are  willing  to 
pay  to  prevent  things  being  consumed.  We  build  fences  to 
keep  stock  from  eating  crops,  and  pay  policemen  to  prevent 
people  taking  our  goods.  Conservators  of  capital  merit  in- 
terest for  deferring  its  enjoyment.  Indeed  here  is  the  vital 
distinction  between  the  equities  of  interest  and  rent,  which 
George  so  persistently  insists  upon.     If  owners  might,  and 


"LIVING"  RATES  OF  INTEREST  AND  RICHES     105 

were  inclined  to,  eat  up  land,  or  eat  up  its  vital  forces  which 
would  not  again  develop  for  some  years,  then  rent  would 
be  as  just  as  interest.  But  owners  can  get  no  possible  good 
from  land  except  by  allowing  it  to  be  used.  So  that  what 
makes  rent  unjust  's  that  they  withold  not  alone  what  they 
need  to  use,  but  what  they  cannot  possibly  use. 

The  effective  results  of  capital  are  as  much  increase 
when  they  make  wealth  available  or  usable,  as  though  they 
created  it  out  of  "darkness  and  void."  Does  not  the  electric 
furnace,  for  practical  import,  create  those  things  which  were 
impossible  to  extract  without  it  ?  Why  then  does  not  a  rail- 
road "create"  coal  for  a  region  which  could  have  none  with- 
out it?  Surely  the  eifectivcness  of  capital  consists  in  its 
increase,  but  the  interest  to  its  owner  is  a  part,  only,  of  this 
increase.  Indeed  there  is  no  reason  why  its  owner  should 
get  any  of  this  increase  but  what  justly  compensates  him 
for  deferring  its  enjoyment.  Capital  in  one  instance  may 
produce  an  increase  of  but  1  to  fi*/^  and  in  another  100  to 
10,000  fold,  yet  the  owner  does  not  (and  why  should  he?) 
get  more  interest  in  one  case  than  another. 

Let  us  repeat  the  simple  law  of  interest:  Interest  is  the 
smallest  price  for  which  those  acquiring  zvealth  zvill  save  and 
devote  it  to  increase.  In  short,  interest  is  the  price  which 
the  proprietors  of  industry  must  pay  for  abstention. 

If  you  lend  me  $10,000,  what  is  it  to  you  what  employ- 
ment I  make  of  it?  Whether  I  sink  a  shaft  and  develop  a 
million  dollar  mine,  or  perfect  an  invention  like  the  tele- 
phone, worth  several  millions,  or  buy  cattle  to  fatten  ;  you  do 
not  charge  me  for  what  I  get  from  it,  but  }ou  charge  me 
$600  per  year  for  your  waiting  to  use  it ;  perhaps  to  build 
you  a  home. 

No  more  do  wages  refer  to  the  results  of  labor.  When 
I  hire  men  to  work  for  me  for  a  month  or  a  year,  they  rate 
their  wages  by  their  own  reluctance,  and  not  by  size  of 
product.     If  I  am  fortunate  enough  to  get  a  big  crop,  or 


106  RIGHT  AND  RICHES 

other  result,  they  are  only  interested  in  a  friendly  way.  No 
less  is  it  true  from  a  selfish  standpoint  that  wages  are  the 
price  of  reluctance  to  give  time  or  toil  when  workers  labor 
at  their  own  enterprise.  They  are  deterred  from  entering 
lines  where  the  product  will  not  compensate  for  their  re- 
luctance. 

This  does  not  deny  the  fact  that  wages  are  from  product, 
yet  they  are  ever  but  a  part  of  output.  This  is  true  because 
no  one  except  in  isolated  instances  would  have  others  labor, 
or  devote  his  own  labor,  to  an  enterprise  that  did  not  pro- 
duce more  than  enough  to  recompense  such  labor. 

Labor  seeks  as  wages  returns  to  maintain  its  wonted 
standard  of  living,  hence  "living  wages,"  and  capital  seeks 
interest  as  a  recompense  for  saving.  Reluctance  to  save  is 
influenced,  as  we  have  noticed  also  by  the  accustomed  stand- 
ard of  living.  This  has  an  important  bearing  on  results ; 
for  labor  and  capital,  thus  basing  their  demands  on  their  ac- 
customed needs,  take  little  cognizance  of  a  multiplying  out- 
put ;  hence  Concession  continues  to  give  these  "usual  wages" 
or  hiring  wages  during  advancing  prosperity,  and  has  left 
as  its  share,  not  only  a  multiplying  quantity  of  wealth,  but 
a  multiplying  percentage  of  output.  This  is  the  reason  that 
rents  and  franchise  dividends  double  up  with  prosperity, 
while  wages  stay  so  much  per  day,  and  interest  so  much  per 
hundred  dollars.  Why  the  merchant  and  farmer  pay  more 
rent,  yet  are  glad  to  make  as  much.  Here  is  the  source  of 
the  common  phrase,  "making  a  living."  Concessionists  don't 
figure  to  "make  a  living,"  they  take  "all  the  traffic  will 
bear." 

The  shares  of  wages  and  interest  are  in  a  manner  fixed 
at  so  much  money  per  day  for  various  classes  of  labor,  and 
so  much  money  per  year  for  each  hundred  dollars  capital 
devoted.  Especially  is  this  so  of  wages  paid  as  a  periodical 
stipend,  and  of  interest  paid  by  borrower  to  lender.  Interest 
is  no  more  a  percentage  of  output  than  wages  are. 


"LIVING"  RATES  OF  INTEREST  AND  RICHES     107 

One  must  figure  the  percentage  of  gain  he  is  deriving 
from  an  enterprise,  not  by  taking  the  ratio  of  his  present 
profits  to  his  initial  investment,  but  the  ratio  of  present 
profits  to  the  present  value  of  his  holdings  in  the  enterprise. 
This  is  the  current  rate  of  profit. 

We  must  particularly  observe  that  the  present  invest- 
ment is  to  be  taken  as  the  basis  of  profit  deduction ;  not  an 
investment  of  long  ago.  That  is,  suppose  one  makes  an 
initial  investment  of  $10,000  worth  of  horses  and  wagons 
for  draying  purposes.  At  the  end  of  a  month,  or  a  year,  he 
should  make  a  balance  sheet  and  inventory  of  his  capital. 
Perhaps  the  horses  have  increased  in  value,  perhaps  de- 
creased. Perhaps  he  has  accumulated  from  the  business 
more  horses,  wagons,  cash  or  other  forms  of  wealth  until 
the  assets  of  the  business  is  $12,000  after  allowing  salaries 
to  himself  and  other  employes.  He  has  then  made  20% 
profit  on  his  capital  for  a  year.  But  unless  he  takes  this 
$2,000  out  of  the  business  and  devotes  it  to  other  uses,  he 
will  then  have,  not  $10,000  capital  invested,  but  $12,000. 
At  the  end  of  another  like  period  it  may  shrink  to  $10,000 
or  $9,000.  Every  business  man  does,  or  should,  balance 
his  business  at  least  once  or  twice  a  year ;  that  is,  in  a  sense 
"close  it  up  and  start  over"  by  reinvesting  the  assets  which 
the  inventory  and  balance  sheet  show  to  be  then  on  hand. 
The  rates  of  profit  must  then  be  calculated  on  this  rein- 
vestment. 

The  profit  through  the  use  of  capital  is  from  the  increase 
or  reproduction  which  it  gives.  The  rate  of  interest  is  but 
the  part  of  this  increase  which  the  real  furnisher  of  capital 
actually  gets  and  not  what  it  produces,  for  much  of  this  in- 
crease is  most  commonly  taken  by  concession.  This  is  the 
vital  point.  Capital  really  invested  in  a  gas  plant  might 
show  a  return  to  the  investors  of  20  to  30%  if  based  on  the 
ratio  of  annual  income  to  real  zvcalth  assets.  But  here  we 
nuist   not   forget  our  reinvestment   rule.     Its   last  balance 


108  RIGHT  AND  RICHES 

sheet  may  show  real  wealth  assets  30%  and  franchise  value 
70%.    Hence  supposing  its  capital  be  $1,000,000,  what  then 
is  reinvested  consists  in  $300,000  real  wealth,  and  $700,000 
concession.     Hence,  seven-tenths  of  its  income  is  accessage  . 
and  only  three-tenths  real  interest. 

The  stock  and  bond  issues  of  such  companies  are  usually 
kept  up   to   the  total   value   of   the   wealth   and   concession 
assets  combined.    That  is  up  to  an  amount  on  which  the  net 
income  will  be  somewhere  near  5%.     If  new  capital  is  de- 
sired the  investing  public  is  asked  to  furnish  it  at  this  rate. 
That  is,  the  public  is  asked  to  furnish  real  capital  on  such  a 
basis  that  it  will  only  get  a  fraction  of  the  natural  increase 
which   the   capital   employed   by   the   enterprise   really   pro- 
duces.    Now  what  is  the  result  of  this?     Simply  that  with 
a  rising  tide  of  prosperity,  which  comes  periodically,   the 
ample  funds  of  capital  are  not  offered  a  participation  in  this 
lanrcr  increase,  but  are  offered  stocks  and  bonds  more  and 
more  attenuated  as  prosperity  continues;  more  and  more 
inflated  in  proportion  not  alone  to  the  real  capital  actually 
employed,  but  even  to  the  rates  of  income  of  such  concerns 
until  the  public  in  large  numbers  refuses  to  buy.    This  ends 
in  a  panic  in  which  such  securities  are  suddenly  "deflated" 
which  would  be  well  enough  were  not  honest  values  like- 
wise annihilated  and  the  whole  system  of  commerce  thereby 
paralyzed. 

H  it  were  not  for  this  monopolizing  of  the  benefits  of 
prosperity  by  concession  and  the  dishonesty  of  stock-jobbers, 
unlimited  floods  of  capital  would  respond  to  the  attraction 
of  a  bountiful  increase  in  industry.  Holders  of  lands  and 
franchises  want  others  to  furnish  the  real  earned  capital  for 
all  construction,  and  are  only  willing  to  give  them  5%,  even 
though  the  whole  property  pays  18%. 

The  increase,  or  profit,  in  any  industry  on  the  original 
capital  employed  becomes  accessage  or  rent  to  the  extent 
that  it  exceeds  the  percentage  the  public  investors  may  earn 


"LIVING"  RATES  OF  INTEREST  AND  RICHES     109 

by  investing  in  it  on  the  basis  offered  them.  If  a  gas  plant 
costs  $200,000  and  pays  $40,000  net  per  year,  the  pubHc 
may  only  get  in  on  a  basis  of  about  $1,000,000  capitaliza- 
tion. Hence  this  $40,000  is  $8,000  interest  and  $32,000  ac- 
cessage.  The  opportunity  to  employ  capital  profitably  is 
limited  only  by  the  restraint  of  concession.  When  a  new 
device  displaces  much  labor,  its  first  tendency  is  to  give  in- 
creased output.  The  immediate  results  probably  will  be 
great  profit  to  owners  of  such  devices.  Then  there  is  a 
rush  of  wealth-owners  to  produce  and  operate  such  devices, 
and  if  not  restricted  by  patent  or  otherwise,  prices  of 
product  will  fall  proportionately,  which  brings  the  profit 
of  such  ownership  down  to  the  average  interest  rate.  The 
next  tendency  is  an  increased  accessage  rate  or  rent  for 
land,  or  other  opportunities  where  it  may  be  used,  which 
boosts  prices  of  output  up  to,  or  above,  former  prices.  This 
is  apparent  in  the  tremendous  increase  in  commodity  prices 
and  of  rents  coincident  with  industrial  progress. 

Great  claims  are  made  for  a  new  automatic  gold  dredg- 
ing machine.  If  it  will,  with  nominal  cost,  extract  gold 
from  areas  of  sand,  what  will  be  the  result?  The  first 
builders  may  make,  as  it  is  claimed,  from  one  hundred  to 
several  hundred  per  cent,  per  annum,  but  how  long  before 
gold-bearing  lands,  where  these  dredges  will  work,  will 
assume  immense  value.  This  is  but  a  more  simple  illustra- 
tion of  the  appropriation  of  the  increase  given  by  all  forms 
of  equipment.  Street  cars  are  of  no  greater  value  with  con- 
solidation of  companies,  and  growth  of  patronage,  but 
franchises  are. 

Now  as  prosperity  advances,  this  fixed  or  accustomed 
sum  of  mojiey  paid  by  concession  to  labor  and  capital,  this 
usual  number  of  dollars,  has  a  smaller  and  smaller  purchas- 
ing power.  Yet  concession  persistently  refuses  to  give 
more  than  so  much  wages  per  day  until  threatened  with  labor 
strikes,  and  it  as  persistently  refuses    to    give    more    than 


110  RIGHT  AND  RICHES 

four  or  five  per  cent,  interest.  Instead  it  increases 
stock  and  bond  issues  to  the  limit  on  which  such  per 
cent,  can  be  promised.  But  owners  of  capital  are  not  a 
segregated  class  as  are  union  wage  earners,  therefore  they 
are  not  organized.  These  furnishers  of  capital  have  other 
interests;  they  are  in  most  cases  also  laborers,  or  slight 
owners  of  concession.  They  do  not  send  their  business 
agent  to  demand  more  of  proprietorism ;  they  do  not  say  to 
Wall  Street,  "You  must  give  us  7  or  8%  or  we  will  strike." 
No,  they  just  quietly  and  individually  strike.  While  this 
rebelling  or  refusing  by  savers  proceeds  quietly  and  unher- 
alded, its  effect  is  as  widespread  as  a  labor  strike,  but  it  is 
insidious.  Small  sums  of  capital  returning  to  investors, 
five,  fifty,  a  hundred  or  ten  thousand  dollars,  which  before 
were  hurriedly  reinvested,  are  now  hoarded  or  consumed. 
Owners  now  quietly  refuse  to  put  them  again  into  trade  or 
industry,  until  given  more  favorable  terms.  It  is  as  truly  a 
strike  as  that  of  labor,  but  it  is  individual,  unorganized  and 
unspoken. 

The  important  question  is : 

Do  strikes  pay? 

Is  simple,  dogged,  stupid,  passive  refusal,  with  its  stop- 
page of  output,  an  effective  means  of  remedying  too  low 
wages  or  interest?  The  disastrous  results  of  labor  strikes 
are  well  recognized,  but  capital  strikes  have  never  been  de- 
termined by  a  true  diagnosis,  but  are  called  by  the  vague 
name  of  "industrial  depression."  They  are  usually  compli- 
cated by  a  paroxysm  of  fear  called  a  panic.  The  present 
rates  of  wages  and  interest  are  entirely  determined  by  strikes 
which  manifest  the  refusal  of  producers  to  take  less  than  the 
minimum,  concertedly  fixed  by  labor,  and  spontaneously 
demanded  by  capital  owners.  But  these  strike-projectors 
make  no  attempt  to  attain  anywhere  near  their  Natural  Re- 
ward. They  strive  but  to  maintain  "Living  Wages  and 
Interest." 


"LIVING"  RATES  OF  INTEREST  AND  RICHES     ill 

The  foregoing  rules  of  "Living  Wages  and  Interest"  are 
not  based  on  immutable  laws  of  truth ;  they  are  but  a  pre- 
sentation of  the  jangling  contentions  of  selfishness  which 
obtain  in  the  prevailing  status  of  industry.  Heretofore  re- 
formers have  not  even  attempted  to  define  an  infallible 
standard  of  true  Wages  and  Interest. 

Without  a  scientific  determination  of  the  true  measure 
of  such  rewards,  how  shall  we  know  how  much  we  should 
expect?  How  shall  producers  know  how  much  they  lack 
of  receiving  their  just  compensation? 

The  prevailing  Rules  of  industry  are  diametrically  op- 
posed to  the  Golden  Rule. 


CHAPTER  III. 

The  Eminent  Domain  oe  Greatest  Eeeiciency. 

"One  only  master  grasps  the  whole  domain; 
And  half  a  tillage  stints  thy  smiling  plain." — Goldsmith. 

OUNTLESvS  millions  flow  into  the  coffers  of  con- 
cession yearly  from  the  control  of  land,  franchises 
and  other  forms  of  monopoly.  No  property  ex- 
ists without  labor  or  privation  endured,  or  to  be 
endured  for  it.  Value,  the  essence  of  property,  is  the  posi- 
tive to  a  negative  suffering.  Utility  is  not.  The  most  es- 
sential blessings  come  unearned,  but  property  means  the 
power  to  command  service.  Every  dollar  received  for  rent 
of  priceless  business  sites,  for  fertile  field  or  mine,  for  divi- 
dend earned  on  franchise  privilege,  represents  labor  or  de- 
privation. Who  are  the  losers  of  this  vast  revenue?  Does 
it  mean  the  "hire  of  the  laborer  kept  back  ?"  Does  it  mean 
overcharge  to  the  consumer?  Does  it  mean  the  despoiling 
of  society  of  her  property?  It  may  mean  either  or  all. 
From  whence  does  this  unearned  wealth  come?  The 
answers  heard  to  this  question  are  many. 

If  workers  do  not  deserve,  nor  even  ask  a  wage  com- 
mensurate with  output;  if  owners  of  Capital  when  fixing 
the  rate  it  shall  demand  as  interest,  take  no  cognizance  of 
the  amount  of  increase  resulting  therefrom ;  if  concession, 
because  it  contributes  nothing,  has  no  right  to  any  share 
whatever  of  output,  to  whom  then  does  accessage  rightly 
belong?     It  irrefutably  belongs  to  Society. 

What,  then,  is  the  Natural  Estate  of  Society? 
What  is  the  Natural  Reward  of  Producers? 
What  is  the  Natural  Price  to  Consumers? 

112 


THE  DOMAIN  OF  USE  113 

What  are  the  Scientific  Rates  of  Wages,  Interest,  Rent 
and  Taxes? 

First,  let  us  particularly  distinguish  these  classes  of 
humanity.  It  is  common  to  assume  that  consumers  and  so- 
ciety are  practically  identical,  and  in  loose  conversation  to 
say  that  everyone  is  a  laborer,  and  even  to  designate  those 
who  dominate  the  earth's  property  as  simply  stewards  for 
the  people.  But  distinctions  of  these  classes  are  radical  and 
essential  to  a  consideration  of  economics. 

All  people  are  consumers,  and  all  people  are  society,  but 
this  does  not  constitute  consumers  and  society  as  one  class, 
for  very  important  reasons.  First,  because,  if  society  means 
anything,  it  means  God's  children — all  having  equal  right 
to  inherit  the  blessings  He  has  provided  for  them. 

Now  consumers  do  not  stand  to  each  other  in  any  rela- 
tion of  equality,  for  they  do  not  consume  equally.  Some  con- 
sume millions,  others  but  dollars.  Not  only  in  quantity,  but 
in  quality  is  this  difference.  A  large  share  of  the  output  of 
wealth  is  of  a  Cjuality  and  kind,  the  use  of  which  is  almost 
unknown  to  the  masses.  What  interest  has  the  person 
working  for  a  starvation  wage  in  the  price  of  sealskins, 
diamonds,  cut  glass,  expensive  laces  and  such  things  which 
he  does  not  hope  to  ever  own.  Hence,  what  cheapens  prices 
of  things  indiscriminately  does  not  benefit  the  masses  in 
proportion,  but  only  what  cheapens  wdiat  the  masses  use. 
In  other  words,  an  average  cheapening  of  prices  does  not 
counterbalance  a  reduction  in  wages,  and  a  raise  of  prices 
in  general  does  not  take  from  laborers  the  benefits  of  in- 
creased wages.  Neither  do  prices  advance  as  a  result  of 
advanced  wages  in  the  ratio  of  the  advance  of  wages. 
Neither  is  the  "laboring  class"  in  its  broad  economic  mean- 
ing anything  near  equal  to  society.  No  doubt  three-fourths  of 
the  wealth  produced  is  consumed  by  others  than  laborers 
and  their  dependents ;  by  those  who  absorb  instead  of  pro- 
mote.   Hence,  the  importance  of  keeping  clear  the  interests 


114  RIGHT  AND  RICHES 

of  producers,  consumers  and  society.  You  may  own  a  few 
shares  of  stock  in  the  IlHnois  Central  Railroad.  Yet  if  it 
owe  you  ten  thousand  dollars,  you  do  not  say,  "let  it  go, 
it's  all  in  the  family,"  that  to  collect  it  would  be  taking 
out  of  one  of  your  pockets  to  put  into  the  other.  No,  you 
say  "my  interest  as  a  stockholder  is  slight  compared  with 
my  individual  interest." 

Society  includes  not  alone  the  millionaire,  the  independ- 
ent middle  class,  and  the  skilled  and  effective  mechanic,  but 
helpless  infancy  and  age,  the  invalid,  imbecile,  the  cripple, 
the  blind.     All  have  claims  on  her. 

Is  a  definite  analysis  of  the  rights  of  these  classes  pos- 
sible? 

The  press  and  platform  are  burdened  with  discussions  of 
monopoly  and  "trust."  The  rich  become  richer  so  rapidly, 
they  are  bewildered  with  their  wealth  and  know  no  remedy, 
yet  destitution  cries  for  relief.  If  these  errant  streams  of 
unwieldy  wealth  may  be  traced  to  their  real  sources  they 
may  perhaps  be  returned  to  their  native  channels.  This  is 
the  great  problem  of  to-day. 

It  is  plainly  evident  that  the  consumer  is  plundered.  Any 
housewife  can  testify  to  that.  The  advanced  prices  of  com- 
modities in  the  face  of  cheapened  methods  of  output  prove 
that. 

It  is  quite  evident  that  the  slight  advances  of  wages  are 
but  a  fraction  of  what  increased  product  would  justify. 

The  great  problem  confronting  the  officers  of  every  com- 
munity is  to  make  the  revenues  meet  the  needs  to  carry  on 
the  urgent  public  work. 

Surely,  then,  the  laborer,  the  consumer  and  society  are 
all  deprived  by  Concession.  But  in  what  proportion?  To 
determine  this  we  must  first  determine  the  native  rights  of 
producers,  citizens  and  consumer. 

What  is  the  NATURAL  REWARD  of  the  producer? 

What  the  inherent  interest  of  Society  in  output? 


THE  DOMAIN  OF  USE  115 

What  the  natural  legitimate  price  to  the  consumer? 

There  is  a  wide  lang^e  of  opinion  as  to  what  is  produc- 
tion's Natural  Reward.  There  is  a  radical  class  who  claim 
the  whole  product  as  the  producer's  reward.  Some  aver 
that  the  whole  product  should  c^o  to  the  laborer  as  wages. 
The  other  extreme  view  held  is  that  natural  zvages  and  in- 
terest is  what  the  market  affords,  what  competition  de- 
termines ;  in  other  words,  what  is  now  paid.  The  un- 
reasonableness of  the  first  class  in  general  causes  the  ac- 
ceptance of  the  view  of  the  last  who  have  the  argument 
convincing  to  many  that  what  is,  is  right.  If  higher  prices 
of  commodities,  as  our  protectionist  friends  teach,  tend  to 
make  wages  proportionately  higher,  what  is  the  harm  of 
higher  prices?  If  producers  merit  the  whole  product,  what 
interest  have  we  as  citizens,  and  not  producers,  in  the  ques- 
tion? On  the  other  hand,  if  Accessage  is  the  charge  for 
what  rightly  belongs  to  Society,  wherein  is  the  producer's 
cause  for  complaint?  As  a  matter  of  fact,  a  large  class  of 
producers  take  this  view.  As  producers,  neither  laborers 
nor  capitalists  are  liable  to  give  much  thought  to  the  re- 
striction of  output — to  what  is  added  to  the  consumer's 
price  by  high  rates  and  rents.  Mr.  Paul  Morton  in  speak- 
ing of  railroad  rates  says : 

"The  people — the  consumers — must  be  protected  against  ex- 
tortionate rates  imposed  by  the  railroads.  I  say  the  people, 
because  the  shipper,  who  is  often  a  middleman,  is  not  so  much 
interested  in  keeping  rates  fair.  The  shipper  does  not  want 
discrimination;  he  does  not  want  A  to  be  given  a  lower  rate 
than  B;  in  short,  he  does  not  want  rebates  unless  he  alone 
can  have  them.  The  shipper's  interest  demands  that  he  bring 
his  goods  to  market  at  a  no  higher  charge  for  carrying  than  that 
paid  by  every  one  of  his  competitors,  to  the  end  that  they  do 
not  undersell  him  and  put  him  to  loss.  There,  however,  the 
shipper's  interest  usually  comes  to  an  end.  He  wants  all 
shippers  to  pay  equal  rates,  with  no  favoring  rebate  discrim- 
inations to  any  one,  so  that  all  shall  enter  the  market  on  even 
terms.     The   height   of  freight   rates,   so  that   they   be   equal   is 


116  RIGHT  AND  RICHES 

not  to  him  of  prime  importance.  "With  the  man  who  buys 
from  the  shipper — the  consumer  finally — the  business  lies  the 
other  way  about.  The  shipper,  fixing  his  selling  price,  adds 
the  freight  charge  to  the  original  cost.  The  consumer  pays 
the  freight.  The  freight  rate  thus  becomes  an  element  in  price- 
making.  Wherefore,  I  repeat  that,  in  order  to  protect  the  pub- 
lic, the  consumer,  the  Government  should,  in  all  cases,  whether 
interstate  or  otherwise,  insist  that  freight  rates  shall  be  reason- 
able." 

We  need  not  look  to  the  renting  farmer  to  reform  land 
laws,  nor  to  the  employe  of  oppressive  franchised  corpora- 
tions to  bother  about  reasonable  service  and  rates.  They 
are  often  better  paid  than  the  average  worker  and  are  care- 
less. Many  declare  that  the  natural  scarcity  of  native  re- 
sources give  such  resources  their  value,  and  that  it  matters 
not  to  workers  whether  society,  or  individuals,  collect  the 
rental.  Very  truly,  the  coal  vein  does  not  especially  belong 
to  the  user  of  the  pick,  nor  the  forest  to  tlic  v/ielder  of  the 
ax.  The  tendency  of  the  producer,  the  business  man  in 
general,  is  to  underestimate  his  rightful  reward.  It  is  the 
theorist,  the  talker  and  writer  who  exaggerates  the  pro- 
ducer's natural  share.  In  the  most  primitive  state  of  in- 
dustry the  producer  naturally  gets  the  whole  output  as  his 
reward.  This  is  his  Natural  Reward,  where  there  is  no 
preference  in  sources  of  supply. 

But  such  a  condition  cannot  be  found  where  production 
has  advanced  beyond  the  most  primitive  stage.  Only  in 
the  most  remote  districts  will  a  producer  find  resources  and 
conditions  on  equal  terms  to  all..  We  may  imagine  that  one 
savage  has  a  right  to  hunt  or  fish  equal  with  every  other 
of  his  tribe,  or  to  plant  a  few  hills  of  corn,  or  gather  wild 
growths. 

With  the  first  steps  of  real  industry,  however,  we  find 
producers  appropriating  quantities  of  native  supplies  and 
setting  up  exclusive  claim  to  the  use  of  certain  privileges. 
The  placer  miner  goes  to  work  washing  out  precious  metal 


THE  DOMAIN  OF  USE  117 

from  the  field  of  sand.  At  first  the  number  of  miners  are 
few  and  all  work  in  common  as  neighbors.  But  as  the  in- 
flux of  gold-seekers  begins,  they  stake  out  their  claims  to 
areas  of  sand  and  inches  of  water.  The  new-comers  find 
the  opportunities  restricted.  The  most  primitive  agriculture 
recognizes  the  advantage  of  the  specially  fertile  valley.  The 
smallest  village  has  a  corner  or  point  of  especial  value. 

Here  then  is  the  radical  error  of  the  "historical"  school 
of  economics.  It  does  not  recognize  this  evolution  of  value 
in  the  control  of  the  peculiarly  advantageous  positions  by 
producers.  The  honest  workman  with  all  good  purpose 
takes  possession  of  a  tract  of  land  on  the  bank  of  a  stream 
which  he  proceeds  to  use,  cultivating  some  and  pasturing 
stock  on  the  rest.  He  needs  to  cross  the  stream  occasionally. 
Hence  he  rigs  up  a  rude  boat.  Others  wish  to  cross.  He 
carries  them  for  honest  fare.  What  is  wrong  with  such 
conduct  ?  Nothing.  But  this  travel  increases ;  dozens,  then 
hundreds  wish  to  cross  the  stream  there.  For  a  rental  he 
permits  a  store  to  be  built.  Then  he  leases  the  ferry  privi- 
lege. Then  other  lots.  The  travel  increases  to  thousands. 
A  city  grows.  Our  workman  is  no  longer  a  workman.  He 
does  not  live  by  his  wages  but  from  tribute  paid  by  the 
growing  population  for  access  to  the  advantages  of  which 
he  got  possession.  He  did  not  create  them.  He  simply 
happened  along  where  they  were.  Thus  the  Vanderbilt 
fortune  grew. 

How  many  schemes  of  philanthropic  colonization,  how 
many  co-operative  schemes  of  business  have  come  to  grief 
through  lack  of  recognition  of  this  insiduous  power  of  do- 
minion. Many  colonies  have  gone  into  the  remote  wilderness 
thinking  the  members  and  their  descendants  would  be  free 
from  domination  of  a  hated  aristocracy,  but  how  soon  has 
the  same  class  arisen  among  its  own  members  based  on  the 
power  of  appropriated  resources. 


118  RIGHT  AND  RICHES 

Plainly,  then,  we  cannot  arrive  at  justice  by  the  lazy 
methods  of  present  and  past  practice ;  by  letting  the  pro- 
ducer have  absolute  ownership  of  the  area  he  appropriates. 
Let  us  then  take  as  our  postulate  and  foundation  law  of  all 
justice:  that  society  is  the  primary  ozvncr  of  all  output; 
that  the  individual  acquires  just  ownership  only  as  society 
in  equity  grants  it  to  him. 

"Knotv  from  the  bounteous  heavens  all  riches  flow. 
And  what  man  gives,  the  gods  by  man  bestow." — Homer, 

The  correctness  of  this  postulate  is  made  more  evident 
by  the  fact  that  producers  do  not  claim  a  reward  propor- 
tionate to  output,  but  only  sufficient  to  maintain  their  ac- 
customed standard  of  living.  They  ask  only  for  Living 
Wages  and  Interest,  but  they  are  ever  seeking  for  larger 
opportunity  to  produce. 

It  is  the  self-evident  duty  of  Society  to  procure  the  best 
possible  "living,"  the  largest  possible  supply  of  wealth,  for 
her  members  in  the  aggregate ;  we  need  not  at  present  in- 
quire as  to  its  apportionment.  Output  is  from  three  ele- 
ments, Resources,  Accumulated  Capital  and  Human  En- 
deavor. Then  if  Society  has  an  inalienable  right  to  all  Re- 
sources, which  cannot  be  questioned,  what  must  she  do  to 
secure  this  Greatest  Possible  Supply?  Manifestly  she  must 
secure  to  the  ever-willing  producers  a  scope  of  opportuni- 
ties or  resources  so  broad  and  rich  as  to  admit  of  the  high- 
est possible  efficiency  from  the  efforts  of  all. 

There  is  a  story  of  a  modern  ship  being  stranded  on  a 
fertile  but  uninhabited  island.  It  was  conveniently  loaded 
with  a  quantity  of  seeds,  machinery,  and  other  useful  stock 
and  equipment  for  starting  industry  on  the  island.  Now 
suppose  you  were  governing  such  a  colony  thrown  upon 
such  unclaimed  field.  Suppose  you  thus  commanded  100 
producers  and  were  responsible  for  their  best  subsistence ; 
would  you  not  carefuly  select  for  operation  the  most  choice 
resources   which   such   island   afforded?     First   of   all   you 


THE  DOMAIN  OF  USE  119 

would  select  as  a  place  for  your  little  city  or  settlement  the 
best  possible  site,  and  not  some  miserable  swamp,  as  is  often 
the  site  of  cities.  You  would  give  careful  attention  to  plan- 
ning the  best  arrangement  of  such  city.  You  would  then 
put  your  woodsmen  to  work  on  the  choicest  trees,  your 
plowmen  on  the  richest  soil,  your  fishermen  would  be  di- 
rected to  where  the  catch  was  most  valuable,  your  quarry- 
men  would  take  the  most  available  stone.  You  would  not 
let  a  man  work  at  one  place  when  he  could  produce  twice 
the  results  at  another.  Moreover,  you  would  try  as  much 
as  you  could  to  let  the  builder  build,  and  keep  the  smith  at 
the  forge,  instead  of  compelling  them  to  do  that  for  which 
they  had  no  aptitude  or  taste.  In  other  words,  you  would 
seek  to  have  continually  the  largest  possible  use  of  the  re- 
sources of  the  whole  island.  Hence  you  would  not  tolerate 
that  one  person  should  appropriate  and  control  the  best 
timber,  water  supply  or  boat  landing. 

Even  so  should  Society  do,  "that  it  may  give  seed  to  the 
sower  and  bread  to  the  eater." 

Society  should  guarantee  to  all  producers  the  best  re- 
sources possible.  Or  stated  conversely :  She  should  assert 
her  right  to  guarantee  that  the  resources  should  be  used 
to  the  highest  possible  efficiency.  To  this  end  she  should 
assert  her  title  to  that  scope  of  the  best  quality  of  resources 
needed  for  the  fullest  use  of  all  workers,  so  that  no  one  need 
work  with  opportunities  inferior  to  any  opportunities  that 
were  idle. 

A  railroad  has  the  right  to  take  bv  condemnation  what- 
ever  property  is  needful  to  its  most  efficient  operation.  Why 
should  not  all  producers  be  given  this  same  right,  the  ac- 
cess to  the  most  efficient  means  of  production? 

It  has  ever  been  recognized  that  the  State  has  the  right 
to  take  what  is  needful  for  it  to  use  for  the  best  interest  of 
all.  This  right  is  termed  Eminent  Domain.  The  State 
delegates  the  right  of  Eminent  Domain  to  railroads.  Why 

8- 


120  RIGHT  AND  RICHES 

not  to  all  producers?  Giving  this  eminent  power  to  one 
class  only,  gives  it  authority  over  all  others.  Is  it  anarchy 
to  deny  the  right  of  an  industry  to  shut  down  and  leave  its 
thousands  of  employes  idle  and  helpless?  Even  Russia  has 
prohibited  such  closing  of  works. 

Should  producers  of  every  class  have  the  right  to  appro- 
priate the  use  of  the  best  resources  needful  to  the  largest 
output,  we  might  term  this  the  "EMINENT  DOMAIN  OF 
GREATEST  EFFICIENCY,"  or  "The  Domain  of  Use." 

The  apprehension  of  the  nature  and  import  of  this  zone 
of  opportunity  is  the  first  step  in  the  solution  of  our  prob- 
lem. The  vital  principle  involved  in  the  extent  of  this  do- 
main is  the  only  solvent  by  which  an  analysis  may  be  made 
of  the  tribute  taken  by  Concession.  Hereby  we  may  isolate 
Preclusion,  that  blight  equally  ruinous  to  producers  and 
consumers.  As  the  extent  of  Preclusion  is  the  extent  of  the 
consumer's  overcharge,  and  also  the  extent  of  labor's  dep- 
rivation, we  may  thus  deduce  what  would  constitute  Nat- 
ural Prices  and  Natural  Wages.  We  shall  further  learn 
that  the  marginal  line  of  this  Domain  on  which  all  may  find 
opportunity  to  produce  with  the  highest  efficiency,  is  the 
MARGIN  OF  NATURAL  RENT. 

The  whole  problem  is  practically  solved  when  we  realize 
how  small  a  fraction  the  present  results  of  industry  are, 
with  producers  operating  on  inferior  resources,  of  what  they 
would  be,  were  all  workers  and  all  capital  employed  with 
the  most  effective  opportunities.  It  is  amazing  to  compre- 
hend how,  under  this  rational  management  of  opportunities 
"of  the  people,  by  the  people,  for  the  people,"  both  the 
supply  of  consumers  and  the  reward  of  producers  might  be 
multiplied,  and  with  only  a  fraction  of  the  effort  and  ab- 
stention now  endured.  Yet  this  emancipation  of  mankind 
is  prevented  only  by  the  wanton  preclusion  of  the  use  of 
rich  opportunities  which  are  now  held  idle. 


THE  DOMAIN  OF  USE  121 

If  owners  of  opportunities  allowed  their  fullest  use  and 
took  only  the  premium  which  preference  is  worth,  they 
would  not  then  dwarf  production  to  a  fraction  of  its  nat- 
ural output,  nor  would  a  given  area  of  resource  have  its 
present  intense  rental  power.  We  may  illustrate  this  by 
the  power  of  a  stream  flowing-  down  a  canon.  If  the  whole 
of  such  stream  is  allowed  to  pass  over  a  wheel  with  its  nat- 
ural flow,  some  power  is  generated;  but  if  we,  by  a  high 
dam,  impound  such  stream  and  keep  back  its  flow  until  we 
have  a  head  of  two  or  three  hundred  feet,  we  may  then 
project  a  fraction  of  its  flow  against  a  turbine  with  an  in- 
tensity hundreds  of  times  as  great,  and  limited  only  by 
the  height  of  our  impounding  dam.  Just  so  does  the  price  of 
coal,  or  salt,  or  starch,  or  oil  depend  on  repression  and  re- 
striction. The  prices  may  be  thus  increased  a  hundredfold, 
and  yet  with  even  less  reward  to  producers. 

Now  natural  opportunities,  land  and  its  elements  and 
the  forces  contingent  on  it,  are  of  varying  degrees  of  rich- 
ness or  capacity. 

Nature  has  not  distributed  the  fertility  of  soil,  the  de- 
posits of  mineral  wealth,  of  streams  and  sea  with  unvarying 
sameness  over  all  areas.  These  things  range  from  small 
areas  of  almost  perfect  richness  to  wide  areas  of  such  pov- 
erty as  to  be  not  worth  attention.  Hence,  to  insure  the  ful- 
lest output.  Society  must  obviously  guarantee  the  fullest 
employment  of  the  richer  grades  of  resources,  beginning  at 
the  richest  and  including  all  those  of  decreasing  grades  of 
richness,  until  her  fullest  needs  are  supplied.  In  other 
words,  no  one  should  be  employed  taking  coal  from  mines 
where  but  ten  tons  were  procured  with  a  certain  quantity  of 
eflfort,  while  other  fields  of  coal  were  idle  where  the  same 
effort  would  produce  a  hundred  tons,  or  even  eleven  tons. 
No  one  should  be  compelled  to  transport  stuff  by  wagon 
at  hundreds  of  times  the  effort  with  which  it  could  be  moved 
by  railroad.     Society  should  guarantee  the  full  working  of 


*    122  RIGHT  AND  RICHES 

the  richer  resources,  and  by  the  most  effective  means.  To 
this  end  she  should  assert  her  rightful  ownership  of  all  such 
richer  resources,  and  give  everyone  access  to  them  on  equal 
terms,  so  that  they  may  enjoy  their  natural  function  of  cre- 
ation. Millions  of  tons  of  fruit  should  not  be  allowed  to  rot 
in  orchards  because  freight  rates  are  exorbitant.  Conces- 
sion now  dominates  nearly  all  resources,  however  poor  or 
rich. 

The  revenues  of  concession  are  from  two  distinct  fac- 
tors. The  first  is  natural  rent,  or  the  natural  value  of  the 
actual  use  which  is  made  of  the  resources  controlled.  The 
second  factor  is  that  addition  to  natural  prices  which  are 
levied  upon  consumers  by  means  of  monopoly,  or  the  PRE- 
CLUSION OF  USE — by  holding  rich  resources  idle  in 
order  to  limit  output,  which  may  be  termed  PRECLUSION 
CHARGES.  The  Preclusion  Charge  is  a  direct  loss  to  the 
consumer  by  increasing  the  cost,  or  reducing  the  quantity 
of  his  subsistence.  It  is  an  equal  loss  to  the  producer  by 
the  waste  of  that  excess  of  labor  required  to  produce  from 
inferior  opportunities.  Or,  stated  in  another  form: 
Through  Preclusion  of  opportunity,  or  holding  of  resources 
oitt  of  use,  the  producer's  actual  output  is  reduced  in  exact 
ratio  with  consumer's  supply ;  or  in  inverse  ratio  to  the  ex- 
cess of  cost  to  consumers  above  the  Natural  Price. 

If  producers  had  full  use  of  the  richest  opportunities, 
there  would  ensue  such  a  plentiful  product  that  the  same 
total  of  rent  now  paid  to  Concession  might  be  taken  from 
such  product,  and  yet,  with  only  a  fraction  of  present  prices 
to  consumer,  leave  producers  a  multiplied  reward.  Hence, 
we  see  that  Concession  robs  Society  of  its  rightful  revenue 
— natural  rent.  It  thwarts  productive  effort  by  holding  im- 
mense resources  idle  and  diminishing  product,  that  it  may 
thereby  plunder  consumers  through  increased  prices  of 
goods. 


THE  DOMAIN  OF  USE  123 

Let  us  suppose  an  isolated  community  having  100,000 
acres  of  land ;  ten  persons  own  it,  having  10,000  acres  each. 
Instead  of  using  as  much  as  possible  they  agree  together  and 
use  but  a  small  part,  and  by  precluding  the  use  of  the  rest, 
charge  a  proportionately  higher  price  for  the  output.  Now 
is  it  not  evident  that  the  small  production  will  yield  as 
much  to  the  owners  of  the  land  as  though  all  were  culti- 
vated? We  see  then  that  there  is  a  revenue  from  preven- 
tion of  use,  which  is  often  greater  than  that  from  use.  Nor 
do  we  have  to  resort  to  some  small  island  for  example.  In 
California,  almost  adjoining  land  which  brings  rental  of 
$100  or  more  per  acre  per  year,  one  estate  owns  thirty  miles 
of  Ocean  front,  and  not  far  away  is  a  beautiful  island  thirty 
miles  long,  owned  jointly  by  two  men,  who  make  or  allow 
but  the  slightest  use  of  it.  It  is  claimed  that  the  cotton 
planter's  union,  by  limiting  the  acreage,  has  greatly  ad- 
vanced the  price  of  their  crop,  and  that  they  are  now 
alarmed  because  Australia  proposes  to  grow  cotton,  and  are 
already  trying  to  induce  the  Australians  to  join  their  union. 
The  prices  of  iron,  cement,  lumber,  in  fact  most  commodi- 
ties, are  many  times  what  a  full  output  would  maintain.  It 
is  said  that  a  reduction  of  half  from  usual  agricultural 
crops  more  than  doubles  their  price. 

It  is  plainly  apparent  that  under  a  condition  of  society 
where  none  controlled  any  resources  except  such  as  he  act- 
ually used,  there  would  be  due  from  those  using  the  richest 
resources  a  premium  to  compensate  the  less  fortunate  ones 
who  must  produce  from  inferior  supplies.  This  equaliza- 
tion could  only  be  made  in  practice  by  each  paying  to  So- 
ciety, the  real  primary  owner  of  all  resources,  a  premium 
commensurate  with  such  richness,  which  would  be  natural 
rent. 

The  use-preference  or  natural  rent  of  one  parcel  of  re- 
sources over  another  arises  from  dififerent  causes  according 
to  its  class.     The  essentials  or  resources  of  production  from 


124  RIGHT  AND  RICHES 


which  accessage  is  collected  may  be  divided  into  the  fol- 
lowing classes : 

First,  the  SURFACE  of  the  land  or  soil. 

Second,  its  CONTENTS,  mineral  deposits,  etc. 

Third,   ACCESS    to   market,   means   of  transportation, 
communication,  etc. 

The  surface  of  land,  other  things  being  equal,  decreases 
in  value  in  ratio  to  its  distance  from  some  social  center. 
Social  centers  may  be  centers  of  population,  of  exchange,  of 
residence,  education,  or  centers  of  other  attractive  force. 
The  preference  in  contents  of  land  depends  on  their  ease  of 
availableness.  Their  value  decreases,  other  things  being 
equal,  in  ratio  to  the  amount  of  labor  required,  to  procure 
and  adapt  them  to  use.  It  is  manifest  that  only  the  most 
limited  areas  of  land  can  be  at  the  centers.  The  Contents 
of  land,  mineral  deposits,  forests,  clays,  coal,  etc.,  while 
plenty  in  the  aggregate,  are  found  on  more  or  less  small 
areas.  Some  room  is  required  for  operations  in  working 
them ;  so  under  even  ideal  conditions,  it  is  only  possible  for 
but  few  to  use  the  very  best.  One  hill  may  contain,  as  at 
Carara,  enough  marble  for  a  hundred  generations.  Iron 
mines,  limestone  ledges,  coal  measures,  are  almost  inex- 
haustible, yet  beyond  the  reach  of  all  but  the  few.  The 
rapidity  of  decrease  in  availableness  of  supply  from  first 
to  last  choice,  varies  with  different  products.  Fire  clay  is 
limited  in  extent,  while  building  brick  clay  is  general. 
Limestone  covers  wide  areas  in  much  the  same  degree  of 
convenience  to  be  quarried.  There  may  be  but  one  spring 
of  a  certain  mineral  water,  while  water  of  general  utility  is 
widespread  in  its  supply. 

The  control  of  the  means  of  "Access"  to  market  is  per- 
haps of  equal  value  with  the  "Contents"  or  "Deposits"  of 
materials.  How  large  a  portion  of  the  contents  of  land  is 
of  no  value,  because  those  who  dominate  Access  to  market 
through  ownership  of  railroads,  banks,  terminals,  etc.,  and 


THE  DOMAIN  OF  USE 


125 


through  "Combinations  in  Restraint  of  Trade,"  preckide  it 
from  any  outlet. 

Let  us  classify  the  resources  of  a  certain  community  into 
ten  grades;  let  us  suppose  that  it  contains  100  units  of  la- 
bor, each  unit  we  will  represent  by  L.  The  product  of  1 
unit  of  labor  in  the  1st  grade  will  be  wealth  to  the  amount 
of  1,000  units,  or  1,000  W ;  in  the  second  grade,  500  W ;  in 
the  fourth  grade,  250  W ;  in  the  fifth  grade,  200  W,  and  so 
on.  Hence,  on  account  of  preclusion  there  is  only  1  L  or 
1  per  cent,  of  the  labor  of  the  community  employed  in  the 
1st  grade,  2  per  cent,  in  the  2nd,  and  so  on,  according  to 


he  following- 

table : 

Grade  of 

Efficiency 

Units      ^ 

Resources 

of  Labor 

Employed 

Output 

1 

1000 

1 

1000 

2 

500 

2 

1000 

3 

333 

3 

1000 

4 

250 

4 

1000 

5 

200 

10 

2000 

6 

166 

10 

1660 

7 

142 

10 

1400 

8 

125 

10 

1250 

9 

110 

10 

1100 

10 

100 

40 

4000 

15410 

This  table  shows  that  although  twice  the  number  be 
employed  in  the  2nd  grade,  4  times  in  the  fourth  and  ten 
times  in  the  10th,  the  output  is  no  more. 

Again,  supposing  that  the  capacity  or  extent  of  the 
first  grade  would  give  room  for  the  employment  of  50  units, 
or  50%  of  the  labor,  and  the  second  grade  the  other  50%. 
See  what  a  great  increase  of  output  is  possible ;  for  the 
first  grade  would  yield  to  50  units  of  labor  50,000  units  of 
wealth,  and  the  second  grade  25,000  units  of  wealth,  or  a 
total  of  75,000  units,  or  almost  five  times  the  present  output 
with  the  same  expenditure  of  labor.  Therefore,  we  see 
the  margin  of  preclusion  is  at  100,  although  there  are 
abundant  resources,   for  several  times  the  present  output, 


126  RIGHT  AND  RICHES 

having  a  productiveness  sufificient  to  give  labor  an  efficiency 
of  1,000,  or  ten  times  its  present  productiveness.  Hence, 
in  such  a  community,  concession  by  precluding  use  would 
be  causing  the  product  to  cost  ten  times  the  labor,  or  would 
be  reducing  producers'  share  to  less  than  one-tenth  their 
natural  reward  and  increasing  the  cost  to  consumers,  to 
ten  times  its  natural  price. 

Now  of  course  this  is  only  a  hypothetical  community, 
but  let  us  compare  it  with  our  own  community.  Compare 
the  efficiency  of  a  railroad  train  carrying  40  cars  of  40 
tons,  or  1,600  tons,  each,  15  miles  an  hour,  and  a  common 
wagon  carrying  one  ton  three  miles  per  hour.  You  see  we 
have  an  efficiency  of  8,000  to  1.  But  the  railroad  train  will 
take,  perhaps,  in  its  crew,  care-takers  and  track  repairers, 
say,  40  men  to  the  train,  though  I  think  this  could  be  great- 
ly reduced  if  roads  were  double  tracked  and  worked  to  their 
fullest  capacity.  But  even  at  40  men  we  have  an  efficiency 
per  man  of  200  to  1,  yet  we  see  rates  so  high  that  a  common 
wagon  can  compete  successfully  in  some  cases  with  the 
railroad. 

It  is  said  by  eminent  scientists  that  the  gas  from  a 
bushel  of  coal  has  a  much  greater  heat  efficiency  than  the 
coal  itself  as  commonly  used,  and  that  the  by-products  will 
more  than  pay  for  the  work  of  gas-making.  Yet  see  the 
labor  that  is  wasted  in  handling  and  in  using  coal,  and  the 
enormous  destruction  by  smoke,  causing  in  some  cities  an 
excess  of  deterioration  of  several  per  cent,  on  all  structures, 
furnishings  and  fabrics,  or  a  sum  many  times  what  the  total 
cost  of  gas  fuel  would  be.  Why  not  convert  all  coal  into 
gas  or  electricity  right  at  the  mines?  Millions  of  acres  of 
the  best  land  is  idle  while  land  with  not  5%  of  its  efficiency 
for  growing  crops  is  used.  Of  the  better  grades  of  land  a 
large  share  can  be  but  partially  used  by  tenants-at-will.  It 
is  used  but  for  annual  crops,  while  it  might  produce  ten 
times  the  value  in  fruit.     Such  tenants  cannot  give  it  the 


THE  DOMAIN  OF  USE  127 

drainage  or  fertilizing  which  would  multiply  its  output. 
How  many  of  the  best  lots  in  cities  are  cumbered  with 
shacks ! 

There  can  be  no  doubt  that  under  a  wisely  regulated 
production,  with  the  full  use  of  native  resources  and  the 
increased  use  of  improved  methods,  which  would  then  be 
available,  the  output  of  industry  would  be  more  than  ten 
times  what  it  is  now. 


CHAPTER  IV. 

Tpis  Consumer's  Rights. 

HAT  are  the  consumer's  rights  in  the  output  of 
wealth  from  the  abundant  resources  God  has 
provided   for  him? 

What  is  his  loss  to  Concession? 

The  degree  in  which  Concession  deprives  the  consumer 
is  reflected  in  the  general  standard  of  living  among  the 
masses.  In  one  community  meat  is  eaten  by  all,  and  at 
every  meal,  while  the  masses  in  another  may  seldom  be  able 
to  taste  it.  The  standard  of  living  in  one  community  may 
embrace  pianos,  theaters,  art,  periodical  literature,  the  daily 
paper,  education  of  children,  carpets,  horses,  etc. ;  in  an- 
other the  most  meagre  necessities,  due  to  the  exactions  of 
those  who  dominate  the  resources  of  production. 

In  considering  this  question  we  must  entirely  eliminate 
the  money  price  as  a  measure  of  cost,  and  confine  our  es- 
timate to  the  time  cost,  hours-per-day-cost,  in  individual 
effort.  It  is  indifferent  how  many  dollars  each  has,  but 
how  high  a  standard  of  living.  Whatever  curtails  produc- 
tion increases  the  cost  of  living. 

If  birds  or  insects  ravage  crops,  the  planter  is  not  the 
only,  nor  perhaps  the  greatest  sufferer.  How  much  more 
then  is  the  consumer's  concern  when  wanton  idle  humanity 
represses  output ;  for  the  loss  then  is  not  alone  what  output 
is  curtailed,  for  the  hiunan  parasites  use  the  spoil  gained 
by  its  restriction  to  purchase  goods  for  destructive  waste. 

Trust  prices  of  shoes,  flour,  meat,  fuel,  all  the  require- 
ments of  life,  are  too  well  known  to  need  much  comment. 
The  people  of  the  Great  West  are  acquainted  with  the  effect 
of  railroad  rates  on  what  they  use;  yet  there  seems  to  be  a 

128 


THE  CONSUMER'S  RIGHTS  129 

widespread  blindness  to  the  effects  of  a  tariff  tax  on  im- 
ports. But  in  the  ratio  in  which  domestic  commerce  ex- 
ceeds foreign,  a  ratio  of  several  hundred  to  one,  so  the  im- 
portance of  the  tariffs  of  concession  exceed  those  of  custom- 
house dues ;  especially  in  our  own  land  where  we  have  near- 
ly fifty  great  commonwealths  trading  freely  together.  Ex- 
press, telegraph,  telephone,  and  railroad  charges,  and  most 
of  all  land  rents,  affect  us  as  consumers. 

Nevertheless  the  evils  of  the  infamous  tariff  tax  to  both 
producer  and  consumer  can  hardly  be  overestimated.  What- 
ever the  method  by  which  one  individual  or  nation  seeks  to 
profit  by  another's  loss  is  always  unnatural,  wicked,  and  in 
the  long  run  results  in  loss  to  such  nation  or  individual. 

For  hundreds  of  years  the  Moor  pirates  had  levied  trib- 
ute from  the  commerce  of  all  nations.  Their  ancient  head- 
quarters were  at  Tarifa,  hence  the  word  "tariff."  The 
American  spirit  of  freedom  rebelled  and  the  cry  was  raised 
"Millions  for  defense,  but  not  a  penny  for  tribute,"  and 
these  bands  of  pirate  tariff-takers  were  driven  from  the  seas. 
And  as  this  spirit  of  freedom  becomes  more  enlightened,  as 
the  masses  come  to  have  enough  fraternal  love  and  un- 
selfishness to  stand  together  and  support  a  defense,  we  shall 
see  concession's  piratical  tribute  resisted. 

But  the  tariff  issue  as  defined  by  the  two  dominant  par- 
ties is  devoid  of  principles.  One  party  wants  a  tariff 
avowedly  for  protection,  the  other  wants  a  tariff,  of  the 
same  rate  as  far  as  we  may  judge  by  their  declarations, 
but  for  goodness  sake,  not  for  protection !  For  revenue 
only ! 

Nothing  could  be  a  more  palpable  absurdity. 

I  knew  a  schoolboy  who  was  caught  stealing  quite  a 
quantity  of  tobacco  from  a  schoolmate,  and  when  the 
teacher  was  surprised  to  think  he  wished  to  chew  it,  he  pro- 
tested with  righteous  indignation  that  he  did  not  chew.  He 
was  going  to  put  it  in  his  clothes  to  keep  the  moths  away, 


130  RIGHT  AND  RICHES 

and  seemed  to  be  totally  oblivious  to  the  crime  of  taking  it. 
What  possible  difference  can  it  make  to  the  victims  of  the 
tariff  whether  the  enactors  of  the  law  have  the  one  or  the 
other  of  two  abstract  motives? 

Those  who  pay  customs  dues,  either  do  owe  the  gov- 
ernment or  they  do  not.  If  they  do  they  should  pay ;  if  they 
do  not,  then  to  make  them  pay  one  cent  is  a  crime.  And 
who  pays  but  the  consumer?  For  it  is  ever  added  to  the 
price  of  goods. 

Yet  a  tariff  injures  producers  in  like  degree  by  narrow- 
ing their  field  of  opportunity. 

But  we  in  America  have  been  especially  blessed  in  that, 
while  concession  has  continued  to  increase  its  levy  on  pro- 
duction, the  wide  domain,  whose  margin  appears  to  be  al- 
most reached,  afforded  a  constant  extension  of  opportun- 
ity, which,  coupled  with  our  marvelous  inventive  genius, 
has  steadily  multiplied  output.  Hence,  while  the  standard 
of  life  among  us  is  dreadfully  repressed,  while  the  results 
of  poverty  on  the  millions  among  us  is  pitiable,  yet  this 
widening  of  fields  and  improvement  of  process  has  given 
to  at  least  a  numerous  minority  of  our  citizens  a  standard 
of  life  beyond  the  dreams  of  older  countries.  For  notwith- 
standing the  outcry  among  us  against  trusts  and  predatory 
wealth,  the  extent  of  Preclusion  in  America  is  but  a  frac- 
tion of  what  it  is  in  older  countries ;  it  simply  takes  a  more 
noticeable  form. 

This  is  why  immigration  sets  so  strongly  our  way.  This 
is  why  our  standard  of  wages  is  higher.  But  these  new 
lands  in  America  are  all  but  exhausted.  What  will  continue 
this  prosperity  ?  Education !  Civilization !  Brotherly 
love !  Christianity !  We  have  developed  a  citizenship  that 
will  not  be  again  enslaved  by  the  hereditary  class.  The 
leaven  of  Christianity  is  working.  Benevolence  is  increas- 
ing. Love  in  the  family  is  more  general.  The  air  is  full 
of  reform.    The  Americans  of  to-day,  crowded  to  the  limits 


THE  CONSUMER'S  RIGHTS  131 

of  new  land,  are  getting  ready  to  stand  together  for  their 
rights.  The  next  few  years  will  see  a  reform  of  tax  and 
title  laws ;  a  resistance  of  high  rents.  Sir  Thomas  Lipton 
says  such  abundant  production  as  we  are  having  in  Ameri- 
ca was  probably  never  dreamed  of  before  in  any  country. 
Yet  discontent  is  now  almost  as  great  among  the  masses 
at  the  inequality  of  its  diffusion  as  in  the  hardest  times. 

There  is  a  correlation  between  inventive  genius  and  this 
wider  field  of  opportunity  which  our  wide  domain  has  af- 
forded. Given  a  large  native  supply  to  draw  upon,  the 
producer  bends  his  energies  to  develop  the  resource  with 
mind  as  well  as  muscle.  Steam,  electricity,  compressed  air, 
steel,  cement,  all  the  elements  of  science  and  invention  are 
called  into  use.  But  when  the  real  producer  (for  we  must 
eschew  the  sophistry  which  includes  all  profit-takers  as  pro- 
ducers, all  stock  jobbers,  land  speculators  and  franchise 
grabbers)  when  the  real  producer  is  only  a  beast  of  burden, 
having  no  interest  in  his  task,  with  the  beneficiary  of  his 
toil  a  distant  hereditary  parasite  on  industry ;  whence  can 
come  application  of  progressive  means  ? 

But  the  fruit  of  every  scientific  process  is  to-day  largely 
taken  by  Concession.  Greed  is  now  less  dense,  less  person- 
al, but  more  highly  organized.  Does  a  gas  company  offer 
a  larger  percentage  of  interest  to  seekers  of  investment  be- 
cause its  by-products  increase  from  year  to  year?  No,  it 
issues  more  stock.  Does  it  sell  gas  cheaper?  Very  seldom. 
Do  inventions  and  discoveries  in  general  tend  to  raise  the 
rate  of  wages?  Not  directly.  The  extent  to  which  the 
fruits  of  progress  and  larger  output  are  taken  by  conces- 
sion-holders must  be  studied  and  apprehended  by  the  people 
before  relief  can  come.  If  the  investment  of  a  certain  sum 
in  a  given  line  of  industry  return  profits  above  a  regular 
interest  rate,  what  is  the  result?  Capital  will,  if  permitted, 
flow  into  such  industry  rapidly  until  the  normal  rate  is 
reached.     But  if  the  owners  of  the  industry  have  a  control 


132  RIGHT  AND  RICHES 

of  resources  by  which  competition  can  be  avoided,  then 
their  concern  automatically  assumes  a  vested  value,  and 
the  stock  sold  to  the  public  by  them  represents  this  infla- 
tion rather  than  increase  of  real  capital  and  productive- 
ness. Access  to  resource  and  market  assumes  a  value  equal 
to  the  difference  between  the  actual  sum  invested  and  the 
amount  on  which  income  will  now  pay  normal  rates. 

It  is  common  for  the  stocks  and  bonds  of  such  concerns 
to  be  increased  by  the  issue  of  what  is  confusingly  termed 
"watered  stock,"  until  they  reach  an  amount  of  which  the 
ordinary  rates  of  5  to  7%  will  be  paid.  The  expression 
"watered  stock"  conveys  the  thought  of  dilution,  as  a  dis- 
honest person  might  put  water  into  syrup.  The  addition  to 
securities,  such  as  here  indicated,  represents  the  growth  of 
concession's  value,  which  is  the  most  permanent  form  of 
value  and  the  most  likely  to  pay  dividends.  This  growth  of 
concession  value  proceeds  both  from  increased  patronage 
and  higher  tariffs  as  well  as  from  lower  production  cost. 
Though  such  a  concern  borrow  capital,  it  will  pay  only  mar- 
ket rates.  Accumulators  of  capital  are  still  restricted  to 
market  interest  rates  when  they  wish  to  invest. 

President  Roosevelt's  recent  message  has  inadvertently 
raised  the  discussion  of  a  most  important  question.  Is  the 
State  under  any  obligation  to  recognize  the  sacredness  of 
property  based  on  this  inflation  ?  Must  rates  for  public 
service  be  based  on  the  topmost  price  to  which  stock-jobbers 
can  boost  prices  by  fictitious  sales  and  misrepresentation  ? 
Must  we  pay  $1.00  for  gas  because  gas  stock  sells  on  the 
basis  of  $10,000,000  valuation  for  a  plant  that  could  be 
duplicated  for  $1,000,000  simply  because  the  gas  company 
boosts  it  by  boasting  an  exclusive  and  perpetual  franchise? 
Or  has  the  city  the  right  to  build  a  new  plant  for  $1,000,- 
000  and  furnish  gas  on  that  basis  of  cost? 

The  law  of  value  of  groups  applies  with  special  force  to 
concessions.     An  increase  of  the  price  of  commodities  with 


THE  CONSUMER'S  RIGHTS  133 

free  competition,  at  once  tends  to  increase  the  output  and 
so  restore  former  prices.  Not  so  with  concession  property. 
There  remains  but  the  one  gas  company,  one  telephone  or 
telegraph  monopoly.  Every  new  schoolhouse,  every  new 
invention,  everything  that  makes  for  peace,  and  larger  use 
of  wealth,  also  raises  rent.  Every  piano  factory,  every 
automobile  factory,  every  trolley  line,  every  new  magazine, 
every  new  bridge,  every  paved  road,  every  ship  canal,  tends 
to  raise  rent.  All  these  things  increase  the  power  to  patron- 
ize concession,  and  no  increase  in  quantities  of  opportunities 
can  take  place.  The  desire  for  land  is  universal  and  its 
purchase  is  only  limited  by  the  wealth  with  which  to  buy. 

Do  you  know,  Mr.  Consumer,  that  yoii  pay  the  dividends 
on  the  forty  to  eig;hty  per  cent,  of  the  stock  of  corporations 
which  represent  franchises  or  land  title,  controlling  natural 
resources  ? 

How  much  do  we  pay  for  oil,  coal,  lumber,  all  the  com- 
mon essentials  of  subsistence,  in  excess  of  their  productive 
cost  ? 

What  percentage  of  your  annual  income  do  you  pay 
as  the  arbitrary  addition  to  the  price  of  your  fuel  in  the 
past  few  years?  Has  the  Reward  of  Production  increased? 
No.  Whatever  addition  has  been  made  to  wages  paid  to 
miners  has  been  more  than  offset  by  increased  output  with 
improved  methods  and  machinery.  Do  you  know  how 
much  the  freight  rate  on  coal  has  been  advanced  in  the 
face  of  a  reduction  of  fully  half  in  cost  of  carrying  it?  Who 
gets  it?  Why  has  lime,  cement,  sand,  lumber,  everything 
for  the  building  of  a  house  advanced?  The  answer  is,  the 
raw  materials  have  been  cornered,  the  freight  rates  raised, 
the  rent  of  the  manufacturing  site,  and  merchant's  shop, 
doubled  or  quadrupled. 

Do  you  notice  that  the  output  in  many  of  the  larger 
lines  has  been  increased  per  worker  in  the  past  few  years 
from  two  to  ten  fold,  while  the  price  you  are  paying  has 


134  RIGHT  AND  RICHES 

been  increased?  The  cost  of  producing  copper  was  so 
much  reduced  by  improved  process  that  the  deposits  worth 
working  were  multiphed.  Did  the  price  come  down  in  pro- 
portion? No,  the  trust  stored  the  output  and  held  it  up. 
When  the  trust  got  shaky  the  price  fell ;  but  with  its  reor- 
ganization the  price  will  be  restored. 

Did  you  ever  see  a  modern  sawmill  almost  automatical- 
ly snatch  the  logs  from  the  water  and  turn  them  into  lum- 
ber, a  hundred  times  as  much  in  a  day  with  the  same  crew 
as  when  lumber  was  a  third  its  present  price?  Who  gets 
the  profit?  The  owner  of  the  forest  and  the  carrier.  Lum- 
ber was  delivered  to  the  building  a  few  years  ago  for  little 
more  than  present  stumpage  in  Oregon. 

We  should  enjoy  a  multiplied  supply  of  commodities 
out  of  the  multiplied  output.  It  is  our  right  to  demand  it. 
At  the  same  time  that  we  as  individuals  are  engaged  with 
the  problem  of  increased  prices,  our  cities  are  struggling 
with  treasury  deficits  where  they  have  recently  given  away 
franchises  worth  tens  of  millions. 

Even  moral  reforms  increase  this  arbitrary  Concession 
value.  Governor  Folk  in  speaking  of  the  great  benefits  of 
closing  the  race  track  gambling  and  the  Sunday  closing  of 
saloons,  says : 

"The  result  of  two  and  a  half  years  of  strict  enforce- 
ment of  the  laws  in  Missouri  has  been  remarkable.  In  St. 
Louis  there  is  more  building  to-day  than  in  twenty  years. 
In  Kansas  City  real  estate  has  risen  in  value  more  in  the 
last  two  years  than  in  ten  years  before,  and  St.  Joseph  is 
rapidly  forging  to  the  front." 

We  hear  much,  especially  in  campaign  times,  of  the 
importance  of  "the  farmer"  in  the  commerce  of  the  land. 
Now  who  is  this  very  important  "farmer"  for  whom  high- 
priced  wheat  is  desired?  He  is  no  other  than  the  owner  of 
the  farm  land.  High-priced  wheat  means  high  rent,  not 
higher  wages  on  the   farm.     What  class  kept  a  protective 


THE  CONSUMER'S  RIGHTS  135 

tariff  in  England  on  breadstuff  until  the  Cobden  Club  agi- 
tation? Who  keeps  it  on  to-day  in  Germany  but  the  land 
owners?  The  farm  laborer  is  exactly  equal  to  other  labor- 
ers in  what  he  does  for  society.  He  does  no  more  than  the 
factory  worker,  and  deserves  no  more  consideration  from 
the  legislator,  nor  does  he  get  it.  The  land  owner  is  the  fel- 
low who  makes  the  noise.  His  representative  says,  "We 
feed  you  all.  No  business  can  exist  without  the  farmer. 
Agriculture  is  the  basis  of  all  commerce,  etc."  Nonsense! 
We  do  not  any  more  depend  upon  those  who  till  the  soil 
than  other  workers.  The  owner  of  the  land  is  only  an  ex- 
hausting parasite.  But  we  do  depend  on  the  soil.  The 
owning  of  the  land  by  the. so-called  "farmers"  is  of  no  bene- 
fit to  society,  but  the  land  is  vital.  It  is  not  good  for  so- 
ciety for  land  to  be  high  priced  and  rents  high.  Yet  high 
rent  and  high  land  result  from  large  output  of  wealth. 

There  is  a  moral  in  this  for  those  whose  resources  are 
in  land  or  other  form  of  concession.  They  should  see  the 
importance  of  all  progressive  and  moral  reform  to  the  value 
of  their  property.  Good  streets,  good  roads,  good  schools, 
civic  improvement  in  general,  should  be  worked  for  and 
encouraged  by  them  from  purely  selfish  interest,  if  for  no 
other  reason.  It  is  to  the  credit  of  that  bright  body  of  men 
in  the  real  estate  business,  that  they  are  usually  found  work- 
ing energetically  for  every  progressive  measure,  though 
few  of  them  seem  to  realize  the  evil  effects  of  high  land 
values  and  high  rents. 

What  excuse  is  there  to-day  for  anyone  in  this  land  to 
lack  food,  with  such  abundant  crops  and  such  magic  me- 
chanical means  of  moving  them  ;  or  shoes  when  machines 
grind  them  out  by  the  million ;  or  homes  when  there  are 
such  effective  and  bountiful  means  of  building.  Why 
should  babies  and  children  whose  weazen  faces  shov/  lack 
of  nourishment,  be  so  common  on  street  cars  and  in  the 
populous  quarters  of  all  our  cities?     Why  should  human 

9— 


136  RIGHT  AND  RICHES 

beings  in  America  exist  in  dark,  dirty  cellars,  above  or  be- 
low ground?  Why  should  multitudes  of  rural  children  be 
almost  as  bereft  of  the  knowledge  of  real  life  and  comfort  as 
the  beasts  of  the  field?  Why?  It  is  not  alone  because  a 
large  share  of  output  is  arbitrarily  taken  by  those  who  do 
nothing  to  promote  it ;  but  that  output  is  dwarfed  by  the 
preclusion  of  resources  to  use,  by  their  being  held  idle  to 
maintain  excessive  prices. 

Let  us  legally  open  to  production  the  Domain  of  Oppor- 
tunity of  Highest  Efficiency,  by  collectively  asserting  our 
Right  of  Eminent  Domain,  and  thereby  establishing  sup- 
plies at  Natural  Prices ;  by  building  public  roads,  public 
railroads,  public  canals  and  cement  mills,  by  establishing 
public  forests  and  lumbering  plants,  public  water  power  and 
electric  plants,  public  coal  mines,  oil  wells,  refineries  and 
steamship  lines.  Also  let  us  tax  opportunities  held  idle  the 
same  as  like  opportunities  at  work.  Thus  let  us  open  wide 
the  gates  of  opportunity.  Then  there  will  be  no  lack  to 
society's  supply,  for  the  impulse  to  produce  even  in  this 
"world  of  greed"  is  stronger  than  that  of  pay. 

Millions  are  constantly  clamoring  for  the  chance  to  pur- 
sue some  art.  A  few  have  transcendental  notions  of  their 
sphere,  but  the  majority  are  abundantly  practical  in  their 
choice  of  a  calling. 

Thus  let  us  not  only  restore  to  rightful  owners  that  ma- 
jority of  output  now  taken  by  drones,  but  let  us  enable  an 
output  five  to  ten  times  that  of  the  present.  Let  us  claim 
the  prodigious  fruits  of  invention  and  intelligence,  of  prog- 
ress, civilization,  Christianity,  as  the  rightful  estate  of  all, 
and  no  longer  be  satisfied  with  the  crumbs  and  scraps  doled 
out  to  us  by  a  privileged  class. 


CHAPTER  V. 

The  Produce;r's  Rights. 

HAT  are  Natural  Wages  and  Interest?  As  we 
have  before  stated,  workers  are  naturally  im- 
pelled to  produce,  not  by  the  pay  which  is  pre- 
viously stipulated,  either  by  an  employer  or  what 
is  expected  to  be  procured  from  sale  of  output,  but  by  the 
innate  joy  of  producing.  How,  then,  can  there  be  Natural 
Wages  even  as  an  ideal?  Very  consistently,  for  just  recom- 
pense seldom  comes  as  a  stipulated,  but  as  a  natural  return  for 
right  action.  A  good  temperance  man  does  not  refrain  from 
drink  through  fear  of  tremens  or  bankruptcy,  yet  he  gets  the 
just  reward  of  being  temperate.  One  who  is  honest  simply 
because  he  thinks  it  pays,  is  not  safe  to  trust ;  yet  there  can  be 
no  doubt  that  one  who  is  naturally  honest  from  pure  love 
of  honesty  and  from  love  of  right,  should  be  rewarded — is 
rewarded.  So  while  pay  is  not  a  noble  motive  for  labor, 
recompense  is  a  noble  impulse  in  its  beneficiary.  And  while 
greed  does  not  and  cannot  promote  industry,  personal  im- 
pulse and  initiative  can  and  does. 

If  communal  production  and  common  use  may  be  con- 
ceived of  as  a  possible  ultimate  ideal,  which  we  need  not 
here  decide,  at  any  rate  it  may  only  be  reached  by  gradually 
working  up  to  it.  It  seems  far  more  practical  to  undertake 
some  degree  of  common  production  and  use;  that  is,  the 
public  ownership  and  operation  of  some  utilities,  and  mean- 
time to  adopt  an  ideal  reward  for  individual  effort.  Any- 
how, we  shall  need  to  hire  workers  under  public  ownership. 
Let  us  then  seek  to  find  what  such  just  recompense  is. 

We  have  seen  that  the  present  meagre  reward  is  deter- 
mined solely  by  the  demand  for  accustomed  subsistence,  and 

137 


138  RIGHT  AND  RICHES 

tbat  the  so-called  "Margin  of  Rent"  is  only  a  fiction.  But 
when  we  apprehend  the  "Eminent  Domain  of  Efificiency" 
we  find  that  its  margin  is  the  Margin  oi^  Natural  Rknts, 
and  that  this  margin  also  defines  the  measure  of  Natural 
Reward — Natural  Wages  and  Interest — on  the  one  hand, 
and  Natural  Public  Revenue  on  the  other. 

Concession  now  includes  in  her  domain  all  resources  and 
opportunities,  not  alone  that  wdiich  will  pay  to  operate 
whether  now  being  used  or  now  idle,  but  all  that  might  in 
future  pay.  This  is  why  there  is  no  definite  margin  to  Con- 
cession's rent.  But  the  Domain  of  Use,  as  it  includes  no  idle 
resources,  is  not  nearly  so  extensive.  Everyone  could  find 
all  the  room  that  he  needed  for  employment  on  but  a  frac- 
tion of  the  field  of  resources  now  dominated  by  concession, 
were  all  to  work  on  the  richest  and  best. 

Suppose  resources,  soil,  clay,  stone,  mineral  deposits, 
means  of  communication,  etc.,  were  graded  from  the  most 
perfect,  which  might  be  said  to  have  a  productive  capacity 
of  100,000  down  to  that  with  a  productive  capacity  of  1,000, 
100,  1.  Now,  with  all  resources  so  graded,  let  us  suppose 
there  would  be  no  need  to  operate  any  with  a  productive 
capacity  poorer  than  1,000. 

Grade  1,000  would  then  be  the  "Margin  of  Natural 
Rent."  Society  might  then  leave  all  resources  poorer  than 
1,000  open  to  private  use  and  exploitation.  The  whole  out- 
put of  such  "open"  resources  would  then  be  the  minimum 
Natural  Rezvard  of  Production. 

But  you  say  this  is  all  too  theoretical.  It  would  be  im- 
possible to  so  grade  all  resources.  Manifestly  it  would  be 
impossible  to  survey  every  acre  of  land  and  tag  it  with  its 
grade.  But  a  very  simple  rule  will  make  it  automatically 
orade  itself.  Societv  has  but  to  insist  that  no  resource  shall 
be  held  idle;  that  anyone  wishing  to  produce  may  take  pos- 
session of  any  idle  resource  which  is  worth  working — that  is, 
that  use  may  have  Eminent  Domain.     By  this  very  simple 


THE  PRODUCER'S  RIGHTS  139 

rule  the  resources  rich  enough  to  be  worked  would  be  auto- 
matically determined  and  put  to  work.  Thus  a  sufificient 
volume  of  the  best  would  be  selected  and  would  belong  to 
Society.  Whatever  would  be  outside  the  scope  of  this 
Domain  would  remain  open  to  the  pleasure  of  private  ex- 
ploitation, and  its  product  would  be  its  reward. 

Society  should  assert  her  estate  in  such  Eminent  Domain 
of  Resources  by  some  reasonable  means  which  we  will  here- 
after consider,  and  then  all  access  charges  would  belong  to 
society  as  a  natural  source  of  taxes.  Society  should,  how- 
ever, operate  under  her  own  corporate  control  and  manage- 
ment, many  of  the  enterprises  of  production  and  service.  In 
fact  a  large  share  should  be  so  operated ;  a  share  increasing 
with  the  progress  of  civilization  or  brotherhood,  but  to  do  so, 
Society  must  employ  individual  workers  and  perhaps  borrow 
capital. 

What  recompense  should  she  give  such  employes,  and 
capital  furnishers  ? 

How  much  should  mail  carriers,  operators  of  municipal 
light,  heat  or  power  plants,  receive? 

How  much  should  mayors,  governors,  councilmen,  legis- 
lators, congressmen,  receive  as  a  recompense  for  their  serv- 
ices? 

Why,  Natural  Wages,  of  course. 

Why  should  the  public,  any  more  than  a  private  corpora- 
tion, take  service  without  recompense? 

What  interest  should  Nation,  State  or  City  pay? 

Just  such  an  amount  as  people  would  be  willing  to  save 
for — Natural  Interest. 

With  opportunity  for  all  to  produce  and  acquire  wealth 
all  would  have  incomes ;  each  would  have  his  own  ideas  of 
the  price  of  abstention.  Such  price  as  would  procure  the 
saving  of  the  requisite  fund  of  capital  would  be  Natural  In- 
terest.    If  a  certain  rate  did  not  procure  the  desired  fund, 


140  RIGHT  AND  RICHES    . 

more  should  be  paid.  The  aboHtion  of  Preclusion  will  es- 
tablish Natural  Interest  for  the  use  of  capital  is  now  re- 
stricted by  the  concessionizing  of  resources,  by  compelling 
capital  to  accept  a  share  in  common  with  fictitious  and  arbi- 
trary property  in  lands  and  franchises,  represented  by  multi- 
plied stock  and  bond  issues,  calling  for  rents  and  dividends. 

But  with  the  wide  field  of  free  opportunity  outside  the 
Domain  of  Greatest  Use;  or  within  such  domain  after  pay- 
ing Natural  Rent,  Capital  could  always  make  a  liberal  rate 
of  interest.  For  under  such  conditions  there  would  be  such 
unhampered  opportunity  for  the  use  of  capital  and  such 
abundant  increase  from  such  use  that  savers  would  not  be 
compelled  to  stint  and  starve  in  order  to  accumulate. 

Nothing  is  more  absurd  than  to  dogmatically  say  that  in- 
terest should  not  be  more  than  2  or  3  per  cent.  All  have  a 
free  opportunity  to  save,  to  some  extent  at  least,  but  all  have 
not  a  free  opportunity  to  use  capital.  No  class  has  any 
monopoly  of  saving;  hence,  interest  should  be  left  to  agree- 
ment to  supply  and  demand.  This  does  not  deny  the  wis- 
dom of  reasonable  usury  laws  to  protect  the  helpless. 

We  establish  Natural  Wages  and  Interest  when  we  pre- 
vent rich  resources  from  being  held  idle,  for  we  then  open 
up  to  all  the  opportunity  to  produce. 

But  the  question  arises :  How  may  we  determine  what 
is  a  just  rate  of  wages  by  this  natural  standard  until  this 
Domain  of  Opportunity  shall  have  been  established? 

Manifestly,  we  may  not  define  it  in  dollars  and  cents. 

But  by  taking  the  Domain  of  Use  as  a  working  theory — 
even  as  we  use  the  "atomic  theory  of  matter"  and  the 
"etheric  theory"  of  light  as  a  working  basis  in  physical 
science,  and  the  perfect  man  in  God's  image  as  revealed  in 
scripture,  as  our  model  and  basis  of  Christian  science — we 
may  then  begin  to  form  true  and  definite  conceptions.  If  we 
conclude  that  production  might  by  the  most  efficient  use  of 
opportunities  be  multiplied  by  ten,  then  to  be  conservative 


THE  PRODUCER'S  RIGHTS  141 

we  may  at  least  assume  that  wages  ought  to  be  at  least  five 
times  their  present  rate,  and  consumers'  cost  one-fifth  what 
it  now  is. 

If  the  present  wage  among  us  is  an  average  of  $1.50  for 
ten  hours,  we  may  then  safely  assume  $5.00  for  six  hours 
to  be  no  more  than  a  fair  wage.  And  when  we  compute  the 
marvelous  productive  increase  offered  by  improved  pro- 
cesses applied  in  recent  years,  the  correctness  of  such  esti- 
mates of  a  minimum  wage  is  incontrovertible. 

However,  all  reforms  are  best  brought  about  gradually. 
This  ideal  of  Eminent  Domain  must  be  established  by  taking 
a  little  here  and  a  little  there ;  by  extending  the  scope  of  pub- 
lic undertakings ;  by  fixing  lower  and  lower  rates  for  public 
utilities  privately  owned ;  by  establishing  collective  competi- 
tion here  and  there ;  by  breaking  up  the  largest  estates ;  by 
reserving  and  recovering  certain  useful,  natural  deposits ; 
by  extending  the  scope  of  free  public  service  and  enjoy- 
ments, such  as  playgrounds,  baths,  highways,  etc. ;  by  ex- 
tending the  power  to  condemn  property,  now  enjoyed  only 
by  railroads  and  a  few  other  such  corporations,  to  more  and 
more  lines — to  factories,  private  schools,  merchants  and 
farmers.  This  gradual  widening  of  the  productive  field  will 
tend  to  automatically  raise  the  wage  rate  gradually  towards 
the  Natural  Rate. 

As  has  been  pointed  out,  the  opening  up  of  new  and  free 
fields  has  heretofore  been  of  untold  value  to  American  work- 
men. But  this  free  field  for  the  settler  and  prospector  is 
visibly  narrowing.  We  are  rapidly  becoming  a  congested 
community.  Not  that  our  natural  resources  are  not  ample 
for  many  scores  of  times  our  present  population,  but  that 
the  hand  of  greed  grasps  them  and  demands  a  constantly  in- 
creasing toll.  Some  measure  of  reform  is  being  attempted 
in  the  matter  of  withholding  title  to  public  coal  lands.  Re- 
form of  mining  claim  laws  is  greatly  needed.  We  may  con- 
cede a  very  large  reward  to  the  prospector  who  discovers  a 


142  RIGHT  AND  RICHES 

new  camp,  but  what  is  the  sense  in  allowing  those  who  hear 
first  of  its  discovery  to  rush  in  and  stake  free  claims  ? 

Proprietorism  and  Labor  Unions. 

We  have  recently  seen  the  evolution  of  an  alternative 
amontr  us  which  gives  ereat  force  to  the  demands  of  labor. 
This  is  the  labor  union,  imported  from  Britain. 

In  much  "poetical"  economic  writing,  labor  is  supposed 
to  employ  capital  and  "land"  in  production.  Such  it  may  do 
at  the  most  primitive  or  initial  step,  but  m  civilization  little 
production  occurs  where  the  laborer  is  also  proprietor. 

Where  so  remote  that  land  is  valueless,  the  planter  works 
and  gets  the  crop.  But  as  soon  as  civilization  approaches 
he  gets  title  to  the  land,  and  shares  its  crop  whether  he  work 
or  not.  Capital  as  seldom  dictates  the  terms  of  production. 
How  few  industries  are  not  established  on  some  vested  in- 
terest? In  actual  practice  the  great  industries  to-day  are 
controlled  by  "proprietorism."  Manufacturers  have  learned 
this  much  of  economics.  They  now  strive  to  control  their 
raw  material,  and  as  much  as  possible  the  means  of  handling 
it. 

Proprietors  assume  the  sole  right  to  dictate  terms  to 
both  producer  and  consumer.  The  "Boss  of  Production" 
pays  labor  as  low  wages  as  it  may  be  secured  for,  and  sells 
the  output  as  high  as  possible. 

Where  does  he  get  this  right? 

When  street  railways  are  consolidated,  and  the  in- 
creased income  is  stocked   for  millions,   are  wages   raised? 

When  tariffs  are  raised  to  protect  special  interests,  do 
they  raise  wages  as  their  profits  advance? 

It  is  not  a  popular  doctrine  that  the  share  allotted  by 
competition  as  wages  is  not  increased  by  prosperity — by 
largely  increased  output — but  the  facts  support  it. 

If  a  new  process  of  making  starch  gives  double  the  out- 
put with  the  same  labor  and  cost  of  equipment,  either  one  of 


THE  PRODUCER'S  RIGHTS  143 

two  things  will  occur — starch  will  be  cheapened  in  propor- 
tion and  the  consumer  get  the  benefit,  or  on  the  other  hand, 
the  starch-makers  combining  the  skill,  etc.,  will  merge  and 
issue  double  the  stock,  or  the  land  where  the  starch-giving 
plants  are  grown  will  bring  more  rent;  usually  the  latter. 
Workmen  in  starch  works,  or  those  who  grow  starch- 
yielding  plants,  would  receive  no  more  on  account  of  the  in- 
creased output,  but  as  consumers  they  would  benefit  if  the 
price  were  lowered.  What  a  terrible  appreciation  of  land 
has  resulted  from  prosperity  in  the  last  three  years !  Ad- 
vances from  25  to  500  per  cent,  in  farm  lands,  and  equally 
as  much  in  city  lots ;  will  agricultural  labor  easily  get  nmch 
advance  when  crops  must  pay  on  such  valuations?  With 
constant  advances  of  rent,  will  factory  workers  and  mer- 
chants gain  much  from  big  output  and  sales? 

"Proprietorism"  is  commonly  called  "Capitalism,"  but 
this  is  a  misleading  term.  Society  and  Labor  have  no  quar- 
rel with  Capital.  The  Proprietor  is  an  intermediary  be- 
tween the  worker  and  owner  of  capital  on  the  one  hand, 
and  Concession  on  the  other.  Sometimes  he  owns  some 
real  capital;  sometimes  he  does  productive  work;  some- 
times he  owns  concessions,  but  usually  he  is  the  agent  of 
both  Capital  and  Concession,  and  generally  is  oblivious  of 
any  distinction  between  capital  and  concession.  Proprietor- 
ism  is  not  a  new  institution.  Abraham  and  Lot  divided  the 
plain  between  them.  Their  ignorant  herdmen  were  then 
ready  to  fight  for  their  masters,  but  unconscious  of  their  own 
rights,  as  some  "hirelings"  are  to-day. 

The  rapid  increase  of  mechanical  and  engineering  skill 
in  recent  years,  by  their  increased  power  of  output,  has  mul- 
tiplied the  importance  of  control  of  deposits  of  native  re- 
sources. Real  producers — workers — who  control  their  sup- 
plies, are  rapidly  becoming  a  thing  of  the  past.  Proprietor- 
ism  has  taken  the  field.    Without  some  means  of  enforcing 


144  RIGHT  AND  RICHES 

their  demands,  laborers  and  capital  savers  would  be  en- 
slaved. 

However  great  the  loss  to  himself  and  to  society,  the 
capitalist  can  refuse  to  save,  to  renew  capital,  can  consume 
the  old  if  the  rate  is  too  low,  but  laborers  cannot  indefinite- 
ly cease  working.  Left  to  individual  freedom  of  contract, 
they  will  be  enslaved.  The  labor  union  is  a  necessity  to  pre- 
vent this  enslavement  of  the  laborer;  for  the  acquisitiveness 
of  the  individual  laborer,  as  manifested  in  his  capacity  to 
look  out  for  his  own  interests  in  the  matter  of  wages,  tends 
to  decrease  in  inverse  ratio  to  his  productive  efficiency. 

Left  to  the  false  protection  of  individual  selfishness,  his 
case  is  hopeless.  The  laborer  can  never  be  liberated  by  his 
own  avarice,  but  only  by  its  very  opposite,  benevolence, 
brotherly  love.  He  must  be  saved  by  obedience  to  the  com- 
mand, "Let  every  one  consider  not  his  own  but  his  brother's 
good." 

The  measure  in  which  Labor  Unions  represent  this  true 
unity  of  man  will  also  be  the  measure  of  their  benefits  to 
workers.  This  conception  does  not  imply  the  laborer's 
hatred  of  his  employer,  but  united  resistance  to  wrong  sys- 
tems. 

"To  the  capitalist  corporation  the  wage  contract  is  simply 
a  question  of  so  many  dollars  to  be  paid,"  writes  Sidney  Webb 
in  the  International  Monthly.  "To  the  workmen  it  is  a  matter 
of  placing,  for  10  to  12  hours  out  of  every  24,  his  whole  life  at 
the  disposal  of  his  hirer.  What  hours  he  shall  work,  when  and 
where  he  shall  get  his  food,  the  sanitary  conditions  of  his  em- 
ployment, the  safety  of  the  machinery,  the  temperature  and 
atmosphere  to  which  he  is  subjected,  the  fatigue  or  strains  that 
he  endures,  the  risks  of  disease  or  accident  that  he  incurs,  all 
these  are  involved  in  the  workinen's  contract,  and  not  in  his 
employer's.  These  are  matters  of  as  vital  importance  to  the 
wage  earner  as  are  his  wages.  Yet  about  these  matters  he  can- 
not, in  practice,  bargain  at  all.  Imagine  a  weaver,  before  ac- 
cepting employment  in  a  Massachusetts  cotton  mill,  examining 
the  proportion  of  steam  in  the  atmosphere  of  the  shed,  testing 
the   strength    of  the   shuttle   guards,   and   criticising   the   sound- 


THE  PRODUCER'S  RIGHTS  145 

ness  of  the  shafting  belts.  A  Pittsburg  mechanic  prying  into 
the  security  of  the  hoists  and  cranes  or  the  safety  of  the  lathes 
and  steam  hammers,  among  which  he  must  move:  a  work  girl 
in  a  Chicago  sweatshop  computing  the  cubic  space  which  will 
be  her  share  of  the  workroom,  discussing  the  ventilators, 
warmth  and  lighting  of  the  place  in  which  she  will  spend  nearly 
all  her  working  life,  or  examining  disapprovingly  the  sanitary 
accommodation  provided:  think  of  the  man  who  wants  a  job 
in  a  New  Jersey  white  lead  works  testing  the  poisonous  influ- 
ence of  the  particular  process  employed,  and  reckoning  in 
terms  of  dollars  and  cents  the  exact  degree  of  injury  to  his 
health  which  he  is  consenting  to  undergo.  On  all  these  mat- 
ters, at  any  rate,  we  must  at  once  give  up  the  notion  of  free- 
dom of  contract.  In  the  absence  of  any  restraint  of  law,  the 
conditions  of  sanitation,  decency  and  security  from  accident  in 
the  various  enterprises  of  the  United  States  Steel  Corporation, 
or  the  Standard  Oil  Company,  the  Western  Union  Telegraph 
Company,  or  the  Pennsylvania  Railroad,  are  absolutely  at  the 
mercy  of  the  rulers  of  these  great  undertakings.  They  decide 
these  questions  of  life  for  the  millions  of  workmen  whom  they 
employ — and  thus,  to  this  extent,  for  the  American  Nation — as 
arbitrarily  (and  it  is  to  be  hoped  as  humanely)  as  they  do  for 
their  horses." 

"In  the  general  course  of  human  nature,"  remarked  the 
shrewd  founders  of  the  American  Constitution,  "power  over  a 
man's  subsistence  amounts  to  a  power  over  his  will." 

False  Notions  of  Capital. 

It  is  a  great  fiction  that  rich  Proprietors  bring  the  cap- 
ital to  a  community.  They,  of  course,  do  to  some  extent, 
but  not  in  the  degree  popularly  estimated.  There  is  but  an 
infinitesimal  part  of  Output  applied  as  "Capital"  in  the  or- 
dinary acceptance  of  the  term.  Of  course,  the  whole  output 
may  be  termed  capital,  or  stock,  during  a  more  or  less  brief 
period  of  its  development,  but  even  so,  almost  the  total  value 
of  such  stock  consists  of  tribute  for  concession.  A  crop  of 
corn  growing  is  capital,  but  its  cost  is  largely  rent  until  it 
is  almost  ready  for  use.  A  house  in  course  of  construction 
is  capital,  but  the  workmen  may  wait  until  it  is  completed 
for  their  pay. 


146  RIGHT  AND  RICHES 

In  a  city  of  100,000  people  the  annual  production  of 
wealth  may  be  $1,000  each,  or  $100,000,000.  An  influx  of 
foreign  capital  of  $10,000,000  in  a  year  in  that  city  would 
be  thought  remarkable.  An  application  of  one-tenth  of  the 
production,  or  $10,000,000  per  annum  for  any  number  of 
years,  would  be  be3'0nd  precedent.  So  it  is  easy  to  see  that 
if  capital  and  labor  were  free  to  use  the  resources  of  nature, 
and  supply  the  needs  of  society,  no  borrowing  need  ever  be 
done  by  one  community  from  another.  Mechanics  of  small 
wages  who  buy  lots  on  easy  terms  get  good  homes  in  a  few 
months  without  paying  other  interest  than  on  the  cost  of 
the  lot.  A  $100,000,000  street  railway  is  perhaps  $85,000,- 
000  franchise.  Even  the  fifteen  million  real  capital  was  not 
an  initial  investment  of  more  than  perhaps  a  few  hundred 
thousand,  which  was  supplemented  perhaps  by  part  of  the 
fares  taken  in.  There  is  no^lack  of  capital,  but  lack  of  op- 
portunity to  use  it.  If  capital  got  all  natural  interest  instead 
of  concession  gettin.g  most  of  the  natural  increase,  no  lack 
of  capital  would  ever  be  felt. 

As  prosperity  increases,  the  "capital  stock"  of  industrial 
corporations  is  doubled,  trebled,  quadrupled  to  be  sold  to 
the  masses  for  their  savings.  Does  this  mean  more  real  de- 
votion of  capital  to  industry?  No,  but  that  those  who  own 
the  franchises,  lands,  or  other  monopoly  power,  of  such  in- 
dustry, are  trading  its  increase  of  value  for  this  stock,  and 
then  unloading  this  stock  onto  the  public.  Hence  conces- 
sion, by  this  means  absorbs  the  wealth  people  are  ready  to 
devote  to  productive  capital,  and  squanders  it  in  "riotous 
living." 

An  example  of  productive  power  when  the  industrial 
Proprietor  controls  his  material,  is  exhibited  by  a  great  steel 
company.  This  organization  has  secured  unlimited  supplies 
of  ore,  fuel,  and  transportation  facilities.  They  are  even 
now  arranging  to  avoid  the  expenses  incident  to  city  activi- 
ties— high  rents,  etc. — by  building  a  plant  on  cheap  rural 


THE  PRODUCER'S  RIGHTS  147 

land.  No  wonder  its  output  staggers  comprehension.  No 
wonder  if  its  profits  are,  as  it  is  said,  75%.  But  the  real 
producer,  the  puddler,  the  roller,  the  miner,  the  recent  buyer 
of  its  securities,  does  not  get  this  saving.  They  perhaps  enjoy 
some  increase;^  but  only  a  fraction  of  what  goes  to  the  pro- 
prietors. Yet  there  is  much  advantage  to  society,  even  that 
the  proprietor  of  industry  should  dominate  the  resources  of 
production,  instead  of  capricious  disinterested  drones,  for  it 
is  the  proprietor's  interest  to  turn  out  the  largest  possible 
output,  and  this  at  least  puts  production  on  a  surer  footing. 
There  is  less  danger  of  shutdowns. 

What  if  all  natural  resources  were  controlled,  not  by 
selfish  industrial  proprietors,  but  by  government,  with  use 
guaranteed  on  equal  terms  to  all  who  would  produce?  En- 
forced idleness  would  cease.  Every  industry  would  expand 
as  has  the  steel  industry.  No  one  would  need  lack  for  any- 
thing. But  the  multiplied  plenty  that  would  result  would 
not  accrue  to  selfish  corporate  proprietors,  to  be  expended 
in  the  vicious  living  that  has  disgraced  Pittsburg,  but  would 
be  divided  betwen  society  and  real  producers — workers  and 
savers.  Workers  would  get  the  Natural  Reward  due  them 
— such  wages  as  were  never  before  known.  And  vSociety, 
with  the  revenue  derived  from  its  natural  income,  would 
banish  poverty,  even  from  the  widow  and  orphan,  from  the 
helpless  invalid,  and  the  mentally  incompetent. 

Millions  of  acres  now  held  idle  would  then  be  used.  In- 
telligent cultivation  would  succeed  the  haphazard  work  of 
tenants  at  the  caprice  of  selfish  landlords.  I  do  not  believe 
there  is  a  county  in  any  State  where  there  is  not  abundance 
of  natural  wealth  either  mineral  or  agricultural.  It  only 
lacks  development.  What  are  the  most  prohibitive  bars  to 
this  development?  Landowners  and  public  carriers.  We 
are  told  that  only  private  enterprise  develops  industry.  Do 
not  the  carrier  systems  favor  the  already  developed  industry? 
The   other  monopoly   interests   do   also.     The   tremendous 


148  RIGHT  AND  RICHES 

force  of  the  banks  and  the  daily  press  is  on  that  side.  This 
further  concentrates  population  about  these  interests  in  the 
big  cities. 

The  complaint  of  merchants  is  common  that  "they  are 
working  for  their  landlord."  Yet  if  they  go  where  rent  is 
low  there  is  no  business.  This  is  not  endorsing  the  pes- 
simistic complaint  of  those  who  believe  the  world  is  "going 
to  the  dogs."  It  is  not;  it  is  coming  "from  the  dogs,"  for  it 
gets  better  every  day.  Nor  were  opportunities  ever  so 
many. 

Motive  and  Opportunity. 

Ours  is  not  a  creed  of  despair ;  it  holds  out  to  the  indi- 
vidual who  has  high  aspirations  the  widest  range  of  op- 
portunities. As  the  vessel  with  powerful  motor  can  ride 
aeainst  adverse  currents  over  the  limitless  ocean,  so  one 
who  is  impelled  by  the  noble  motive  to  be  of  service  to  man- 
kind, may  ever  find  a  field  which  greed,  stupidity  and  fear 
are  powerless  to  circumscribe.  Never  was  there  greater  de- 
mand for  the  Roosevelt,  Folk,  or  Hadley  to  lead  in  the  fight 
on  corruption  than  to-day ;  never  was  such  demand  for 
greater  teachers,  editors,  preachers ;  never  was  there  such 
urgent  call  for  legislators  of  broad  knowledge  of  economics 
and  statecraft ;  never  greater  call  for  proficient  chemist,  en- 
gineer, or  for  the  wise  structural  and  civic  master  builder. 
This  high  and  natural  motive  lifts  one  out  of  the  mire  of 
greed.  Truly  "the  harvest  is  great,  but  the  laborers  are  few." 
There  is  unprecedented  call  for  men  with  right  motives  to 
work  for  human  freedom.  Tuskegee  Institute  is  a  grand 
monument  to  such  endeavor. 

He  who  thinks  only  of  the  pay  envelope  has  poor  chance 
to  succeed.  The  commission  salesman  who  thinks  little  of 
his  commission  until  he  has  earned  it  is  much  the  most  likely 
to  make  the  sale.  The  merchant  who  tries  most  perfectly  to 
serve  his  customers  on  fair  margins  of  profit  is  surest  to  suc- 
ceed.    In  short,  he  who  strives,  no  matter  in  what  line  of 


THE  PRODUCER'S  RIGHTS  149 

work  he  undertakes,  to  do  it  better  than  others,  has  already 
a  broad  field  for  his  efforts.  He  must  work  persistently, 
hopefully,  until  such  time  as  his  merit  is  recognized,  but  his 
ultimate  success  is  sure. 

The  bane  of  the  age  is  the  "get  something  for  nothing" 
class.  The  press  gives  much  space  to  bonanza  fortune 
strikes,  and  Young  America  becomes  intoxicated  with 
dreams  of  similar  luck,  and  forgets  the  true  and  sure  motive 
of  business. 

Success  or  failure  must  obtain  in  one's  thought  before  it 
can  be  manifested  in  tangible  effects. 

It  is  the  listless  class  with  no  aspiration  or  goal  in  life 
who  demand  our  sympathy.  This  vast  army  of  poor,  help- 
less goalless  humanity  is  the  prey  of  the  merciless  system  of 
greed.  The  way  to  pursue  any  course  is  to  have  a  goal 
ahead.  From  this  vast  multitude,  born  amidst  dismal  sur- 
roundings, with  a  childhood  spent  without  play  and  a  youth 
without  hope,  it  is  as  if  by  a  miracle  that  one  becomes  pos- 
sessed of  aspirations ;  yet — 

In  every  face  a  lamp  is  framed 

Like  searchlight  to  project  its  ray; 
By  love  alone  is  it  inflamed. 

And  'lumes  the  heaven  ascending  way. 
Ah,  you  whose  lamps  have  plentier  flow 

Let  brightest  beams  tired  hearts  inspire; 
Though  eyes  begrimed  reflect  faint  glow, 

Love  will  relight  the  holy  fire. 

Success  is  contagious.  Those  great  leaders  of  accomp- 
lishment through  noble  efforts  have  an  inspiring  effect  on 
humanity. 

"But  when  He  saw  the  multitudes.  He  w'as  moved  with 
compassion  on  them,  because  they  fainted  and  were  scat- 
tered abroad  as  sheep  having  no  shepherd  *  *  *  and 
He  began  to  teach  them  many  things."  He  was  the  guide, 
the  way-shower. 


150  RIGHT  AND  RICHES 

Let  us  not  alone  break  down  the  barriers  that  keep  these 
millions  in  the  "jungle,"  but  let  us  through  the  embellish- 
ments and  refinements  of  modern  progress  and  Christianity, 
incite  them  to  come  out  into  the  ranks  of  higher  citizenship ; 
if  need  be,  let  us  drive  them  out  of  both  city  slum  and  rural 
obscurity  into  the  fraternal  ranks  of  useful  activity  by  re- 
placing such  slum  with  Civic  beauty  and  by  banishing  ob- 
scurity with  means  of  intercourse  and  interest.  Much  prog- 
ress in  this  direction  has  been  made,  and  is  being  made. 

"Think  not  that  former  days  were  better  than  these,  for 
in  so  doing  thou  dost  greatly  err." 

But  with  the  advance  of  science  there  should  be  much 
more  rapid  improvement  of  the  condition  of  the  masses. 
The  burden  of  taxation  should  be  taken  from  output  and 
placed  on  concession.  Tax  the  vacant  lot  as  much,  or  more, 
than  the  improved.  Nor  stop  with  this;  allow  the  coal 
miner,  the  oil  driller,  the  home  builder,  the  agriculturist  to 
condemn  land  or  its  deposits,  just  as  a  railroad  company 
may  do,  taking  full  account  of  all  real  equities. 

A  few  acres  of  iron  in  one  body  was  recently  sold  for 
150  million  dollars. 

Why  has  our  government  given  away  this  vast  wealth? 

Principally  because  it  has  largely  been  appropriated  by 
the  owners  before  its  worth  was  recognized  by  the  public. 
Shrewd  men  have  gone  ahead  of  population  and  grabbed 
great  tracts  of  land.  Some  of  them  are  now  being  prose- 
cuted. Close  corporations  began  to  grab  street  railway  fran- 
chises while  electricity  was  little  understood,  and  when  it 
became  recognized,  continued  to  get  them  by  bribery. 

The  greatest  obstacle  in  the  way  of  reform  is  the  ten- 
dency of  people  to  defer  to  precedent.  That  is  the  fatal 
weakness  of  lawyers  as  legislators.  They  worship  prece- 
dent as  the  Chinese  worship  their  dead  ancestors.  The  fol- 
lowing forceful  presentation  of  this  matter  is  from  the  St. 
Louis  Censor : 


THE  PRODUCER'S  RIGHTS  151 

"Among  other  things  that  are  being  probed  by  an  ever- 
increasing  number  of  people,  is  the  great  and  vital  question  as 
to  whom  this  planet,  called  the  earth,  rightly  and  justly  be- 
longs. It  constitutes  a  question,  that  in  my  humble  opinion  will 
have  to  be  answered  in  the  next  fifty  years,  and  will  assert 
itself  with  ever-growing  insistence. 

"The  statement  is  believable  that  ninety  people  out  of  a 
hundred,  on  first  hearing  the  right  of  private  ownership  in  land 
questioned,  are  mildly  shocked,  and  look  upon  such  a  bold  ques- 
tion as  a  dangerous  approach  to  the  verge  of  anarchy;  for  it  is 
a  fact  that  some  errors  take  on  by  reason  of  age  a  sort  of 
sacerdotal  character.  It  may  be  possible,  however,  that  if  any 
of  the  ninety  per  cent  who,  first  hearing  private  ownership  in 
land  questioned,  are  thoughtfully  disposed,  and  follow  the  sub- 
ject up,  ninety-nine  per  cent  of  them  will  come  to  one  conclu- 
sion, namely:  That  private  ownership  in  land  is  one  of  the  most 
monstrous  injustices  that  ever  afflicted  the  earth!  That  un- 
counted millions  have  suffered,  and  that  many  millions  still  suf- 
fer this  great  injustice  handed  down  from  an  intensely  savage 
and  brutally  selfish  era,  is  all  due  to  the  inertia  of  the  human 
mind  and  its  indisposition  to  think." 

"Each  person  born  into  the  world  finds  the  iniquitous  sys- 
tem in  full  working  order,  and  everybody  apparently  convinced 
that  it  is  all  right;  and  such  a  person  accepts  that  whole  propo- 
sition without  a  protest  or  murmur.  It  is  one  of  the  titanic 
errors  that  is  accepted  because  it  bears  the  label  of  tradition. 
If  we  had  to  deal  with  it  at  first  hand,  as  did  our  savage  an- 
cestors who  had  nothing  to  guide  them  but  selfishness,  we 
would  unanimously  pronounce  the  system  monstrously  cruel 
and  unjust." 

Not  less  monstrous,  but  less  excusable,  is  a  private  sys- 
tem of  currency. 

The  basis  of  prevailing  wage  rates  is  that  of  all  value 
— Demand  and  Hindrance.  Employers'  need  of  more  help 
does  not  raise  wages  unless  Labor  can  offer  a  hindrance  or 
demand  for  a  certain  amount.  This  hindrance  is  not  auto- 
matically fixed  by  workers,  but  must  be  arbitrarily  fixed 
outside  of  the  natural  working  of  free  contract,  aside  from 
"supply  and  demand." 

10- 


152  RIGHT  AND  RICHES 

The  labor  union  says  to  its  members :  "When  we  all  re- 
fuse at  once,  another  will  not  take  your  place."  What 
grander  impulse  ever  caused  action  than  unionism,  that  is, 
if  it  be  true  unionism,  whose  uniting  cement  is  love.  Talk 
of  the  patriotism  of  the  soldier !  It  is  nothing  to  that  of  him 
who  packs  his  tools  to  guarantee  his  fellows  a  fair  price 
for  their  work.  All  honor  to  them.  Unionism  has  said  we 
must  have  more  wages,  then  shorter  hours,  then  more  wages, 
then  better  conditions.  Not  "will  you  please?"  but  "you 
must." 

Working  upon  the  following  scientific  platform,  the 
American  Federation  of  Labor  should  accomplish  much : 

First.     Free  schools  and  compulsory  education. 

Second.  Unrelenting  protest  against  the  issuance  and 
abuse  of  injunction  process  in  labor  disputes. 

Third.  A  workday  of  not  more  than  eight  hours  in  the 
24  hour  day. 

Fourth.  A  strict  recognition  of  not  over  eight  hours  per 
day  on  all  Federal.  State  or  municipal  work,  and  at  not  less 
than  the  prevailing  rate  per  diem  wage  of  the  class  of  employ- 
ment in  the  vicinity  where  the  work  is  performed. 

Fifth.     Release  from  employment  one  day  in  seven. 

Sixth.     The  abolition  of  the  contract  system  on  public  work. 

Seventh.    The  municipal  ownership  of  public  utilities. 

Eighth.    The  abolition  of  the  sweatshop  system. 

Ninth.     Sanitary  inspection  of  workshop,  factory  and  home. 

Tenth.  Liability  of  employers  for  injury  to  body  or  loss  of 
life. 

Eleventh.    The  nationalization  of  telegraph  and  telephone. 

Twelfth.  The  passage  of  anti-child  labor  laws  in  States 
where  they  do  not  exist,  and  rigid  defense  of  them  where  they 
have  been  enacted  into  law. 

Thirteenth.     Woman  suffrage  co-equal  with  man  suffrage. 

Fourteenth.  Suitable  and  plentiful  play  grounds  for  chil- 
dren in  all  cities. 

Fifteenth.  Continued  public  agitation  for  public  bath 
houses  in  all  cities. 

Sixteenth.  Qualifications  in  all  permits  to  build  in  all  cities 
and  towns  that  there  shall  be  bathrooms  and  bathroom  attach- 
ments in  all  houses  and  compartments  used  for  habitation. 


THE  PRODUCER'S  RIGHTS  153 

Seventeenth.  A  system  of  finance  whereby  money  shall  be 
issued  exclusively  by  the  government,  with  such  regulations  and 
restrictions  as  will  protect  it  from  manipulation  by  the  banking 
interest  for  their  own  private  gain. 

But  having  a  platform  does  not  assure  success.  Love  is 
the  only  true  bond  by  which  men  may  be  united.  There  is, 
unfortunately,  too  much  of  greed  and  hate,  too  much  disre- 
gard of  consumer  and  society  in  the  practices  of  labor 
unions.  Labor  unions  can  never  succeed  until  they  extend 
the  scope  of  their  purpose  to  both  sexes  and  all  races,  and 
to  consumer  as  well  as  producer. 

Captains  of  industry — managers  of  Concession's  inter- 
est— may  not  lightly  refuse  the  demands  of  organized  labor. 
Most  works  on  economics  assume  labor  to  be  helpless,  with 
no  alternative  but  unconditional  acceptance  of  concession's 
terms,  or  retreat  to  the  wilderness. 

But  the  army  of  unionism  does  not  so  readily  capitulate. 
It  has  wise  leaders  (as  well  as  many  unworthy  ones,  just  as 
have  government  and  all  forms  of  social  organization)  who 
see  that  subsistence  is  provided  for  their  campaign ;  who 
devise  means  of  strategy  and  plans  of  siege  to  force  their 
issues.  But  do  not  forget.  Unionist,  that  you  must  be  paid 
from  the  output.  You  must  see  to  it  that  that  continues  to 
increase,  if  you  wish  to  continue  to  advance.  If  you  limit 
apprentices,  you  "kill  the  goose  that  lays  the  golden  egg." 
Encourage  invention !  Invention  helps  you  by  increasing 
the  fund  from  which  wages  come. 

But  there  is  a  weak  point  in  the  plans  of  unionism — a 
danger  constantly  to  be  reckoned  with.  This  is  the  "army 
of  the  idle,"  which  may  ever  be  hired  by  aggregated  pro- 
prietorlsm,  as  were  the  Hessians  to  fight  our  independence. 
If  employment  may  be  provided  for  this  army  the  liberty  of 
labor  is  won  forever.     Edward  Markham  says : 

"It  is  the  first  duty  of  a  government  to  see  to  it  that  all  of 
her  people  have  the  opportunity  to  live  by  labor.  She  must 
keep    opdn   the   gates    of   opportunity,    so    that   every  man   and 


154  RIGHT  AND  RICHES 

every  woman  may  have  the  material  resources  for  living  a  com- 
plete life.  A  government  that  fails  in  this,  fails  in  the  vital 
thing. 

"Progress  and  poverty  have  been  yoke-mates  from  the  most 
ancient  times.  There  is  an  aver-growing  army  of  enforced 
idlers  going  onward  in  the  shadow  of  civilization. 

"This  is  the  pathetic  fact  of  the  modern  world.  Think  of 
the  able-bodied  man  knocking  in  vain  at  the  door  of  life,  beg- 
ging simply  for  the  chance  to  live  by  the  work  of  his  hands. 
There  are  always  tens  of  thousands  of  these  hapless  men.  This 
is  proved  by  the  fact  that  an  army  of  strike-breakers  is  always 
standing  ready  to  swarm  in,  to  take  the  place  of  strikers.  Out 
in  Colorado,  a  certain  city  furnished  work  for  a  drove  of  work- 
less  men,  and  the  shovels  were  piled  upon  the  ground.  The 
men  were  there  promptly  on  the  hour,  and  so  eager  were  they 
for  work  that  they  fell  to  fighting  for  the  shovels,  breaking 
bones  and  shedding  blood,  so  wildly  fearful  were  the  men  that 
the  shovels  would  not  go  round." 

"It  should  not  be  forgotten  also  that  idle  men  are  a  con- 
stant menace  to  the  public  safety.  Not  only  do  the  vagrant 
class  drift  down  from  this  army  of  idle  workers,  but  thieves 
arid  anarchists  are  recruited  from  these  ranks.  A  man  must  do 
one  of  three  things — work,  beg  or  steal.  If  the  labor  market 
denies  a  man  labor  and  the  law  forbids  beggary,  he  sometimes 
forgets  that  the  law  also  forbids  stealing.  Sometimes,  too,  in 
a  government  where  a  man  cannot  find  work,  he  finds  it  easy 
to  lose  faith  in  government  and  go  over  to  the  anarchists  who 
insanely  hope  to  sweep  away  all  of  the  laws  of  order." 

What  causes  this  idle  armyf  It  is  created  and  main- 
tained by  selfishness,  cuhninating  in  Concession's  Preclu- 
sion. It  is  evident  that  this  army  is  not  an  "army  of  lazi- 
ness," else  they  would  not  be  ever  ready  to  take  strikers' 
places.  They  are  prevented  from  work  by  their  lack  of  pur- 
pose and  their  submission  to  the  repressions  exercised  by 
those  who  dominate  the  sources  of  supply.  The  reason  of 
their  idleness  is  given  in  the  pitiful  reply  of  the  vineyard 
laborers  of  scripture,  "Because  no  man  hath  hired  us."  It 
is  sad,  that  to  become  producers,  so  many  must  depend  on 
being  hired;  but  it  is  a  natural  result  of  that  domination  of 


THE  PRODUCER'S  RIGHTS  155 

the  field  of  production  which  enables  owners  to  give  an 
arbitrary  "penny"  to  workers,  and  of  the  prevalence  of  the 
disposition  to  do  nothing  useful  without  pay. 

But  if  we  may  recover  to  society  the  natural  opportun- 
ities now  held  idle  by  concession,  so  that  when  proprietors 
refuse  the  just  demands  of  producers,  they  may  have  access 
to  such  opportunities,  to  start  productive  enterprises  on  their 
own  account,  and  if,  on  the  other  hand,  the  masses  may  gain 
an  impulse  to  effort  based  on  the  living  truth  that  it  "is 
more  blessed  to  give  than  to  receive,"  then  the  "army  of  the 
idle"  will  cease  to  exist.  Then  the  laborer  may  become  a 
free  agent  in  contracting  his  services,  instead  of  being  help- 
less, as  now.  Then  if  Proprietorism  does  refuse  to  hire,  it 
may  not  also,  as  it  now  seems  to  do,  entirely  exclude  pro- 
ducers from  the  field  of  production.  Then  may  labor  assert 
itself  and  secure  its  natural  wages. 

What  would  be  the  relations  which  should  exist  between 
Capital  and  Labor,  if  they,  the  two  real  productive  factors, 
should  get  the  whole  product,  except  what  is  due  Society 
as  its  Natural  Rent?  Under  this  natural  system  of  output 
and  diffusion,  there  may  be  found  the  following  Natural 
Relations : 

First.  There  would  ensue  a  continuously  increasing 
output  in  proportion  to  the  labor  and  capital  employed. 

Second.  This  output,  though  larger  in  volume,  would 
have  a  much  less  total  value  as  measured  in  human  endur- 
ance because  the  hours  of  labor  would  be  shortened.  Its 
money  value  would  depend  on  the  volume  of  money. 

Third.  Output  with  the  progress  of  industry  naturally 
tends  to  increase  in  a  greater  ratio  than  the  increase  of  cap- 
ital employed. 

Fourth.  Natural  wages  tend  to  increase  in  proportion 
to  the  increase  of  output. 

Fifth.  While  interest  naturally  increases  only  in  pro- 
portion to  Capital  Employed. 


156  RIGHT  AND  RICHES 

Sixth.  Hence,  wages  naturally  tend  to  increase  more 
rapidly  than  interest  and  so  to  get  a  larger  percentage  of 
output  in  comparison  with  interest. 

Seventh.  For  while  interest  naturally  tends  to  increase 
in  proportion  to  the  increase  of  capital,  the  rate  of  interest, 
being  a  percentage  and  not  a  quantity,  does  not  tend  to  in- 
crease. 

Eighth,  Rather,  the  rate  of  interest  tends  to  decrease 
from  the  earlier  stages  of  industry,  until  a  rather  ripe  stage 
of  development  is  reached. 

Ninth.  But  the  percentage  of  output  taken  by  accessage 
tends  to  increase  as  the  tides  of  prosperity  rise,  until  it  de- 
prives both  Labor  and  Capital  of  their  Reward,  and  thus  it 
stifles  industry. 

Tenth.  This  is  accelerated  by  the  tendency  of  currency 
under  our  present  system,  to  increase  in  volume  and  de- 
crease in  value  with  the  rise  of  prosperity. 


CHAPTER  VI. 

Society's  Rights. 

"Am  I  my  brother's  keeperf" 

"Ye  eat  the  fat,  *****  ^^^^  y^  ^qq^  ^q^  ij^q  flock. 
The  diseased  have  ye  nut  strengthened,  neither  have  ye 
healed  that  which  was  sick,  neither  have  ye  hound  up 
that  which  was  broken,  neither  have  ye  brought  again 
that  which  was  driven  away,  neither  have  ye  sought 
that  which  was  lost;  but  with  force  and  cruelty  have 
ye  ruled  them." 

IVILIZATION  is  the  right  relation  of  citizens.  Its 
highest  ideal  is  the  obedience  to  that  command. 
"Thou  shalt  love  thy  neighbor  as  thyself."  No 
high  degree  of  civilization  is  possible  without  a 
general  response  to  the  religion  embraced  in  this  command. 
Civilization  is  the  only  remedy  for  the  evils  of  density,  or 
sparseness  of  population.  .  When  men  are  crowded  together 
they  need  the  results  of  the  exercise  of  brotherliness  as  well 
as  when  but  a  few  are  alone  in  the  remote  wilderness.  There 
need  be  no  effort  to  either  directly  increase  or  limit  popula- 
tion. Henry  George  well  points  out  the  natural  instinct 
which  reduces  births  as  the  causes  of  mortality  are  checked. 
Race  suicide  as  regards  numbers  is  not  an  impending  calam- 
ity ;  there  is  no  danger  of  a  lack  of  material  men.  Increase 
of  normal,  spiritual  manhood  is  the  vital  work  before  us. 

Unless  mankind  is  nearing  the  divine  ideal — the  image 
and  likeness  of  the  Maker — their  increase  in  numbers  is  of 
no  more  benefit  than  the  increase  of  rabbits.  It  has  not 
been  the  numerous  races,  but  the  races  with  high  ideals, 
who  have  advanced  man's  social  welfare.  The  physical  ag- 
gregation of  great  numbers  of  men  on  limited  areas  does  not 
by  any  means  tend  to  their  welfare.     One  writer  has  ad- 

157 


158  RIGHT  AND  RICHES 

vanced  the  theory  that  contact  engenders  "Social  Love,"  as 
he  terms  it.  Perhaps  the  right  kind  of  contact  does,  but 
surely  not  physical  contact.  If  crowding  had  promoted  civ- 
ilization, the  world  had  long  ago  been  civilized.  Surely  the 
most  crowded  communities  are  not  most,  but  least,  civil- 
ized. The  contact  that  elevates  is  spiritual  contact,  the  con- 
tact of  Love;  and  this  love  is  not  some  blind  animal  force. 
True  love  is  the  ministering  to  our  brother's  need ;  such  love 
elevates  both  giver  and  recipient.  Those  who  would  learn 
more  of  this  vital  Social  Love  should  read  the  writings  of 
Paul  and  James  and  John.  This  true  Love  is  being  recog- 
nized to-day  as  never  before  as  the  greatest  economic  and 
Social  force.  Its  efforts  are  being  more  beautifully  and  ef- 
fectually organized,  and  applied  in  fraternal,'  municipal  and 
State  undertakings. 

Civic  improvement  is  no  mere  idle  sentiment.  It  is  the 
essential  of  progress  and  advancement.  Beautiful  parks, 
boulevards,  streets,  schools,  libraries,  recreation  grounds  for 
old  and  young,  not  only  express  the  demands  of  a  higher 
thought,  but  promote  it.  Civic  improvement  is  as  old  as 
cities  themselves,  but  civic  improvement  in  the  modern  sense 
is  a  succession  of  steps  toward  a  preconceived  ideal  in  which 
individual  acts  of  improvement  are  related  to  one  another, 
and  are  bent  toward  the  execution  of  a  logical  and  unified 
scheme.  Civic  improvement  is  becoming  a  profession  in 
which  eminent  intellects  are  engaging,  and  it  is  very  profit- 
able from  the  standpoint  of  material  prosperity.  Working 
people  do  more  and  better  work  when  living  in  the  midst  of 
beautiful  and  wholesome  surroundings.  It  pays  factories 
to  have  flowers  over  the  walls  of  their  buildings.  A  city 
which  sets  out  for  a  high  ideal  of  beauty,  as  Kansas  City 
among  others  has  done,  attracts  and  develops  a  higher  class 
of  citizens  than  another  city  which  neglects  them.  How 
does  Concession  repress  and  impede  these  enterprises?  By 
despoiling  society  of  her  natural  revenue,  naturaJ  rent. 


SOCIETY'S  RIGHTS  159 

St.  Louis  has  long  contended  with  a  Terminal  Monopoly 
which  exacts  a  toll  from  her  commerce  for  crossing  the  river. 
This  monopoly  owns  all  the  bridges,  but  it  is  now  proposed 
to  build  a  bridge  with  city  ownership  which  shall  be  free. 
The  principal  bridge,  designed  by  Captain  Eads  and  known 
as  the  Eads  bridge,  is  a  continuation  of  Washington  Avenue. 
But  near  this  bridge  on  Washington  Avenue,  within  a  length 
less  than  2,000  feet,  the  land  fronting  on  this  one  street 
exacts  a  revenue  from  commerce  far  in  excess  of  the  total 
taken  by  the  bridge  combine,  with  which  press  and  platform 
have  resounded.  Think  of  it !  This  little  space  of  land, 
exclusive  of  buildings,  which  no  man  helped  produce,  takes 
a  tribute  far  in  excess  of  the  magnificent  steel  arch  bridge, 
more  than  a  mile  in  length,  another  railroad  bridge,  many 
engines,  buildings,  etc.,  a  tunnel  many  blocks  in  length,  and 
many  miles  of  tracks ;  even  though  this  terminal  property 
pays  upon  a  capitalization  several  times  the  value  of  all  this 
visible  property. 

Yet  nothing  is  said  of  this  landlord's  tribute. 

While  the  rent  of  this  tract  is  so  great  it  is  but  a  speck 
on  the  City's  surface,  nor  is  it  the  highest  in  rental  value. 
Yet  with  all  this  immense  value  which  the  real  estate  of 
the  city  yields  to  its  owners — value  belonging  mainly  to  so- 
ciety—  (for  most  of  its  rent  is  Natural  Rent  or  Use-pre- 
mium) her  charitable  houses  are  crowded  almost  like  the 
prisoners  were  in  the  "Black  Hole  of  Calcutta."  Her 
schools  are  crowded  for  want  of  buildings,  her  streets  poor- 
ly paved,  her  central  parks  crowded  and  tramped  until  the 
trees  refused  to  grow.  What  if  they  get  a  free  bridge ;  will 
commerce  be  the  freer?  Perhaps,  but  will  there  not  be  a 
tendency  to  advance  rents  and  absorb  the  saving?  For  con- 
cession, like  interest,  tends  to  average  itself. 

The  merchants  of  one  city  are  compelled  to  compete  with 
those  of  another,  and  if  other  rates  are  high,  they  cannot 


160  RIGHT  AND  RICHES 

also  pay  as  high  rents.    What  is  true  of  St.  Louis  is  true  in 
greater  or  less  degrees  of  all  cities. 

Many  can  see  no  difference  between  an  investment  in 
Wealth  and  one  in  Concession.  The  rights  of  the  buyer  of 
land  or  stock  in  a  franchised  corporation,  may  be  just  to  the 
extent  of  the  price  he  has  paid,  so  far  as  he  is  individually 
concerned;  it  is  the  same  justice  that  property  in  slaves 
possessed.  It  would  be  wrong  to  deprive  such  investors  of 
their  property,  but  no  one  has  a  just  perpetual  right  to  any 
kind  of  property.  The  value  of  all  property  should  return 
to  the  common  fund  at  the  end  of  certain  periods.  Wealth 
does  so  return,  because  the  old  is  consumed  and  the  re- 
plenishing must  come  through  the  channels  of  output.  But 
Concession  needs  no  replenishing;  it  grows  in  value  with- 
out care. 

In  speaking  of  the  Astor  estate.  Barton  J.  Hendrick 
says : 

"Astor  had  invested  about  $2,000,000  in  New  York  real 
estate.  At  his  death  its  value  was  $30,000,000.  When  William 
B.  Astor  died,  in  1876,  it  had  increased  to  $100,000,000.  By 
1890  competent  authorities  estimated  it  at  more  than  $250,000,- 
000.  The  total  Astor  holdings  now  distributed  among  several 
branches  of  the  family,  amount  to  at  least  $450,000,000.  Here 
evidently,  we  have  a  most  notable  instance  of  the  unearned 
increment.  When  John  Jacob  Astor  died,  the  New  York  Her- 
ald, in  an  editorial  article,  gravely  suggested  that  his  property 
be  divided  in  two  parts,  one-half  to  go  to  his  heirs,  the  other 
to  the  City  of  New  York.  For  it  was  not  Astor's  energy  or 
genius,  said  the  "Herald,"  which  had  made  him  so  rich;  it  was 
the  city's  commerce,  its  fashion,  its  men  of  enlightenment  and 
progress,  which  had  converted  his  goat  farms  and  swamps  into 
the  richest  rent-bearing  soil.  The  owner  of  great  railroads  or 
steel  corporations  must  constantly  nurse  his  fortune,  must  join 
in  the  competition  for  improved  methods  and  the  indispensable 
men.  Under  these  conditions  a  great  fortune  is  a  great  burden, 
maintained  only  by  constant  vigilance.  The  whole  Astor  fam- 
ily, however,  could  sleep  for  a  hundred  years,  and  at  the  end 
find  that  their  riches  had   grown  a  hundredfold.     All  the   eco- 


SOCIETY'S  RIGHTS  161 

nomic  and  social  forces  which  have  made  New  York  the  Ameri- 
can metropolis,  have  entirely,  without  their  instigation,  also 
made  their  wealth." 

A  Striking  example  of  this  deprivation  of  humanity  by 
the  Concession  interest  is  exhibited  in  Los  Angeles.  Per- 
haps history  does  not  give  another  instance  of  such  growth 
in  population  for  a  period  of  ten  years  as  Los  Angeles  had 
from  1896  to  1906,  and  with  this  growth  such  an  exploita- 
tion by  the  real  estate  interest.  Millions  of  lots  were  platted 
from  land  which  recently  cost  the  exploiters  a  nominal 
price  per  acre,  and  through  the  unprecedented  influx  of  peo- 
ple, was  concessionized  up  into  the  total  of  hundreds  of  mil- 
lions, and  sold  to  those  who  sought  to  enjoy  the  glories 
which  Nature  has  there  provided.  Yet  with  all  this  accre- 
tion of  unearned  riches,  the  stewards  of  The  Public's  in- 
terest sat  by  and  failed  to  claim  the  thousandth  part  of  so- 
ciety's share.  To-day  the  city  finds  itself  almost  a  municipal 
pauper,  without  public  buildings,  without  parks,  and  sewers, 
its  streets  rivers  of  mud  when  it  rains;  its  jail  a  foul  center 
of  pestilence  from  inadequate  space  and  sanitary  accommo- 
dations; and  the  overcrowding  largely  occasioned  by  law- 
lessness caused  by  the  desperate  results  on  her  business  in- 
terests of  this  reckless  exploitation. 

Los  Angeles  will  recover  from  this  condition  and  set  her 
house  in  order,  but  the  cost  will  be  paid  by  owners  who  have 
paid  hard  dollars  for  their  land,  instead  of  from  the  un- 
earned increment. 

Every  city  in  our  land  has  had  the  same  experience  in  a 
degree,  but  every  city  has  not  had  the  natural  requisites  to 
create  an  Earthly  Paradise.  Nor  have  these  exploiters  as  a 
rule  had  much  permanent  gain.  Many  of  them  are  now  pen- 
niless. 

The  time  has  come  for  society  to  claim  her  own,  and 
with  this  plenteous  fund  make  cities  fit  for  human  habita- 
tion.   Jefiferson  said :  "The  art  of  government  is  merely  the 


162  RIGHT  AND  RICHES 

art  of  being  honest."  But  it  is  impossible  to  be  truly  honest 
without  the  adoption  of  scientific  principles  as  a  basis  of 
action. 

As  one  cannot  rightly  administer  the  affairs  of  another 
without  a  definite  knowledge  of  the  affairs  which  are  his; 
no  more  can  he  the  affairs  of  a  city  or  State,  without  a 
scientific  knowledge  of  what  constitutes  its  rightful  estate. 
And  science  teaches  that  this  estate  of  Society  includes  the 
whole  of  Natural  Rent.  Yet  this  plethoric  fund  is  but  part 
of  her  rightful  revenues,  for  she  is  the  sole,  rightful  and 
indisputable  heir  of  all  the  wealth  of  past  ages.  Society  has 
no  need  to  beg  for  revenue,  to  impose  on  her  useful  and  pro- 
ductive children  for  burdensome  rates  of  revenue,  nor  to 
skimp  and  economize  in  the  furnishing  and  provisioning  of 
her  house.  She  is  rich  beyond  the  wildest  dreams  of  ro- 
mance. Will  not  you,  dear  reader,  be  one  of  her  attorneys 
to  insist  on  her  claims  to  this  great  estate  ? 

Be:ukf  and  Practice. 

Is  the  ownership  of  and  receipt  of  the  revenues  from 
concession  inconsistent  with  belief  in  the  foregoing  prin- 
ciples ? 

Tom  L.  Johnson  was  reproached  with  getting  a  fortune 
from  protected  industries  while  preaching  against  the  iniqui- 
ties of  the  system;  yet  his  position  was  consistent,  for  he 
used  such  income  to  help  support  the  reform.  It  is  likewise 
consistent  to  believe  in  the  injustice  of  our  land  and  fran- 
chise laws,  and  yet  take  revenues  from  holdings  under  such 
laws,  if  we  use  such  revenues  unselfishly. 

Why  should  all  of  such  revenues  be  resigned  to  the 
wholly  selfish?  Further,  while  such  concession  exists,  it  is 
a  burden  and  a  tax  on  all  our  legitimate  efforts,  and  it  is  in 
a  measure  our  duty  to  recoup  ourselves  by  securing  some 
share  of  accessage,  just  as  we  might  protest  against  the  des- 


SOCIETY'S  RIGHTS  163 

truction  of  forests  or  game,  and  yet  justify  ourselves  in  par- 
taking of  such  forests  or  game  while  there  are  no  laws  to 
prevent  their  wasteful  use. 

We  are  entitled  to  some  share  of  the  increase  given  by 
land  and  social  resources — everyone  is ;  and  we  may  rightly 
secure  to  ourselves  a  share  even  before  we  are  able  to  guar- 
antee it  to  everyone. 


PART  FIVE. 


Reclamation. 

Chapter    I.  Pate^rnalism. 

"         II.  Titlb;  Limitation. 

"       III.  Units,  Monopolies,  Public  Ownership. 

"        IV.  Title  and  Time. 

"  V.  Taxation  and  Compensation. 

"       VI.  OuANTiTivE  Title  Restriction. 


CHAPTER  I. 

Paternalism. 

HE  noble-minded  Ruskin  perceived,  the  unfairness 
of  the  prevaihng  commercial  system.  But  Con- 
cession in  his  time  was  not  so  nearly  developed, 
not  so  nearly  ripe  for  elimination,  as  to-day.  He 
recognized  brotherhood  as  the  natural  relation  of  man  to 
man,  a  relation  the  opposite  of  the  devouring  greed  of  ram- 
pant commercialism.  He  pointed  out  the  failure  of  the 
French  attempt  at  fraternalism,  because  it  lacked  "paternal- 
ism" (as  he  terms  it),  a  condition  precedent  to  fraternalism. 
What  is  paternalism?  We  hear  much  sarcastic  com- 
ment on  "paternalism"  these  days,  when  reforms  are  pro- 
posed. The  term  as  commonly  used  in  such  connection,  im- 
plies a  sort  of  fatherly  pampering  or  partiality  on  the  part 
of  government  to  a  certain  element  or  class  of  citizens. 

When  labor  asks  for  laws  which  it  deems  necessary  for 
its  protection,  the  cry  goes  up :  "Paternalism !  Paternal- 
ism !"  When  laws  are  demanded  to  protect  childhood  from 
the  modern  Moloch,  the  devouring  factory,  there  is  a  loud 
cry  of  paternalism !  When  public  lands,  minerals  or  other 
wealth  would  be  reserved  for  public  good,  there  is  the  same 
cry. 

Now  Ruskin  had  a  perfect  conception  of  an  ideal  pater- 
nalism, however  crude  in  its  details  his  political  economy. 
His  idea  of  paternalism,  was  such  a  government  control  and 
management  of  "the  great  estate  our  Father  has  devised  to 
us  all,"  that  it  should  not  only  prosper  to  the  greatest  pos- 
sible extent,  but  that  the  results  of  its  plenteous  output 
should  be  shared  by  all,  due  regard  being  taken  for  the 
merits  of  each  brother  or  sister. 

-11  167 


168  RIGHT  AND  RICHES 

A  healthy  social  structure  is  not  built  up  by  using  in- 
dividual men  as  the  bricks  thereof — resting  an  appalling 
burden  upon  those  below,  that  those  above  may  attain  to  em- 
inence; but  rather,  as  St.  Paul  has  so  beautifully  portrayed 
it,  society  is  a  vital,  living  organism,  and  individual  men  are 
its  members  as  illustrated  by  the  members  of  our  bodies, 
each  contributing  to  the  nourishment,  well-being,  harmony 
and  beauty  of  the  whole  body,  and  each  dependent  on  the 
whole. 

"And  whether  one  member  suffer  all  suffer."  But  under 
a  system  based  on  individual  greed,  some  men  are  merely 
parasites  on  the  rest. 

Down  with  an  elevated  class  which  is  a  burden  on  those 
beneath ! 

The  powerful  owner  of  great  riches  is  commonly  and 
justly  censured  for  his  greed  when  he  looks  to  the  procure- 
ment of  legislation  promoting  his  advantage.  But,  my 
dear  brothers  and  sisters  who  toil  for  a  meagre  wage,  ex- 
amine your  owM  hearts.  Are  you-  less  selfish  ?  How  much 
thought  do  you  give  to  your  fellow  toiler's  condition?  Ex- 
amine your  own  desires,  and  see  if  you  do  not  covet  property 
for  the  power  which  it  gives  to  dominate  others.  Judgment 
must  be  given  against  you  that  the  primal  and  continuing 
cause  of  your  enslavement  is  your  own  avarice  rather  than 
the  greed  of  the  big  magnates.  Your  greed  to  get  wealth 
solely  for  selfish  consumption.  And  this  is  the  evidence 
which  condemns  you :  That  while  you  hold  the  voting 
power  wholly  in  your  own  hands,  yet  through  your  greedy 
indifference,  you  neglect  to  inform  yourselves  of  the  prin- 
ciples of  government,  or  of  the  legislation  which  your  en- 
slavers procure ;  you  even  neglect  to  vote. 

If  you  would  be  free,  you  must  get  free  along  with  your 
fellows.  Then  in  the  name  of  Heaven,  READ !  THINK ! 
ORGANIZE ! 


PATERNALISM  169 

Organize  not  alone  labor  unions,  but  clubs,  societies,  as- 
sociations, to  protect,  educate  and  elevate  mankind.  If  your 
union  organization  or  government  is  infested  with  grafters, 
rout  them  out !  Attend  the  primaries !  Vote !  Govern  the 
land  for  Humanity ! 

One  object  of  this  volume  is  to  advocate  some  systems 
of  legislative  reform  for  the  reclamation  of  our  birthright 
in  this  wonderful  estate,  bequeathed  us  by  our  Creator,  the 
fruit  of  which  is  being  taken  by  concession.  I  am  not  going 
to  advocate  a  system  of  paternalism,  which  is  expressed  in 
the  mother  bird  who  is  afraid  to  push  her  brood  from  the 
nest ;  for  no  one  wishes  the  government  to  maintain  a  help- 
less class  of  grown-up  infants  on  a  figurative  nursing  bottle. 
Rather  I  wish  to  advocate  the  abolition  of  all  laws  which 
support  "pets." 

Let  us,  then,  rather  demand  the  ideal,  true  paternalism 
of  Ruskin ;  and  what  is  needful  to  introduce  it,  but  the 
abolition  of  favoritism? 

Certainly  "one  may  not  lift  himself  by  his  boot-straps," 
nor  are  the  means  of  subsistence  and  luxury  created  by  law. 
But  legislation,  which  repeals  such  laws  as  permit  the  few 
to  impede  and  destroy,  to  despoil  and  deprive  the  many,  will 
introduce  true  paternalism — will  provide  bountiful  supplies 
for  all. 

I  would  simply  recommend  that  no  laws  be  passed  grant- 
ing franchises  for  the  operation  of  certain,  simple  services. 
I  would  recommend  the  repeal  of  laws  which  extend  title 
beyond  the  life  of  him  to  whom  it  is  granted  as  a  reward  of 
his  service;  of  those  laws  which  despoil  and  discourage  in- 
dustry by  taxation  of  capital,  and  by  imposition  of  licenses, 
tariffs,  and  other  unjust  burdens ;  of  laws  which  give  a  dom- 
ination of  great  expanses  of  natural  opportunity  without  re- 
gard to  use;  of  laws  which  uphold  estates  grown  in  extent 
beyond  the  enjoyment  of  their  owners.  I  would  repeal  all 
such  falsely  paternalistic  laws,  and  let  humanity  come  natur- 


170  RIGHT  AND  RICHES 

ally  into  its  rightful  heritage,  unhampered  by  favoritism. 
These  are  not  new  or  untried  theories.  Yet  it  need  not  be 
expected  that  legislation  alone,  however  wise,  will  perfect 
mankind.  The  discussion  of  progressive  legislative  reforms 
does,  however,  help  to  elucidate  sociological  principles  and 
their  enactment  into  statutes  tends  to  develop  an  improv- 
ing civic  thought  by  making  ideas  fixed  and  tangible. 


CHAPTER  11. 

Title  Limitation. 

AVING  noted  the  present  methods  by  which  con- 
sumers, producers  and  society  are  robbed  of  their 
S      rightful  enjoyment  of  output,  what  means  can  be 
suggested  to  restore  these  losses? 

That  title  to  all  property  primarily  inheres  in  Society  is 
our  basic  postulate.  Therefore,  only  society  can  confer 
title. 

Title  does  not  emanate  from  labor,  any  more  than  from 
capital  or  concession.  Society  now  decrees  title  to  reward 
labor  and  capital,  and  confirms  into  title  the  claims  made  by 
concession.  Those  who  "howl  paternalism"  the  loudest  are 
they  whose  wealth  is  founded  on  the  favoritism  of  govern- 
ment. 

But  when  we  seek  for  the  basic  equitable  principles  of 
title  and  the  laws  which  should  naturally  govern  title,  we 
find  that  the  agent  of  society — government — has  no  just 
right  to  give  perpetual,  or  absolute,  title  for  any  cause.  That 
the  most  that  may  be  naturally  and  equitably  done  is  to  give 
an  "easement"  or  a  preferred  temporary  right  to  use  prop- 
erty, to  him  by  whom  it  is  merited. 

This  awfully  sacred  thing  called  "title,"  or  property 
rights,  is  the  real  incubus  on  civilization. 

Parents  may  have  several  children  and  a  home  with  a 
number  of  rooms.  They  may  assign  one  room  to  John  and 
another  to  Helen  and  another  to  Kate.  Other  brothers  and 
sisters  being  too  young  need  no  separate  rooms.  But  how 
foolish  when  John  or  Helen  go  out  into  the  world  to  be  gone 
for  several  years,  or  forever,  to  hold  their  rooms  unused,  a 
prey  to  moth  and  mildew,  while  the  younger  children,  now 

171 


172  RIGHT  AND  RICHES 

grown  up,  are  suffering  for  their  use.  Why  any  more  should 
society,  our  common  mother,  apportion  the  use  of  her  estate 
for  all  eternity  to  certain  individuals  and  their  descendants? 

Title's  exclusiveness  needs  reforming  as  much  as  its  dur- 
ation. At  the  very  best  we  can  only  concede  a  temporary, 
partial  private  possession  and  control  of  things  for  any  con- 
sideration. The  rights  of  Society  must  at  all  times  be  para- 
mount. This  principle  is  rapidly  being  recognized.  For- 
merly the  owner  of  land  had  the  right  to  inflict  capital  pun- 
ishment thereon.  What  he  may  do  or  allow  on  it  is  con- 
tinually being  restricted. 

Why  should  title  give  to  the  land  owners  of  a  district 
the  authority  to  say  whether  saloons  should  be  licensed 
therein;  or  franchises  granted;  or  nuisances  maintained? 
Many  States  are  taking  away  these  prerogatives  of  realty 
owners.  Many  cities  are  prescribing  rigid  rules  as  to  what 
one  may  build  on  his  own  lot,  as  to  its  sanitary  conditions, 
its  liability  to  burn,  its  nearness  to  the  curb  line,  etc.  In 
Kansas  City  one  is  liable  to  arrest  for  hitching  his  horse  to 
a  tree  in  front  of  his  own  lot. 

But  the  greatest  care  should  be  taken  in  these  restrictions 
not  to  impose  rules  burdensome  to  the  whole  people. 

These  simple  and  beneficial  limitations  are  only  a  be- 
ginning, but  they  denote  some  perception  of  the  true  char- 
acter of  title,  and  as  there  grows  a  broader  apprehension 
of  it,  they  may  be  so  extended  as  to  recover  to  society  much 
of  its  natural  rights  in  property.  Controllers  of  public  serv- 
ice corporations  reluctantly  admit  society's  rights  to  control 
what  is  "one's  own ;"  but  Society  has  a  right  to  enforce  her 
Domain  of  Greatest  Use. 

Title  should  only  extend  to  the  individual  along  such 
lines  and  under  such  restrictions  as  will  guarantee  the  great- 
est common  good. 

But  precedent  dies  hard  in  our  courts.  Many  court  de- 
cisions are  based  on  the  farce  comedies  of  history.     Title 


TITLE  LIMITATION  173 

may  justly  emanate  only  from  the  people,  and  at  the  end  of 
a  season,  like  the  leaves  from  the  trees,  must  return  to  its 
source. 

Every  private  interest  should  be  subordinate  to  the  pub- 
lic good.  This  does  not  imply  the  communistic  doctrine 
which  seeks  the  elimination  of  private  property,  but  rather 
aims  to  make  private  property  more  universal  and  abund- 
ant. All  have  an  inalienable  right  to  live,  but  this  does  not 
mean  that  rations  should  be  issued  to  the  individual  as  in 
time  of  calamity  or  siege.  The  true  principles  of  fairness 
rather  encourage  each  family  to  own  its  home,  to  accumulate 
capital,  to  be  diligent  in  business. 

That  the  only  right  to  subsistence  is  that  bought  by 
labor,  is  one  of  the  most  pernicious  of  doctrines.  All  have 
a  right  to  partake  of  the  glorious  bounties  which  God  has 
given.  Each  one  has  this  right  before  he  is  able  to  work. 
But  all  who  are  able  to  work  owe  it  to  Society  to  do  so, 
and  acquiring  property  by  any  lucky  cause,  cannot  cancel 
that  obligation. 

The  principle  of  "eminent  domain"  should  be  extended 
to  individuals,  as  well  as  municipalities  and  corporations. 
Anyone  should  have  the  authority  to  condemn  property  for 
any  useful  purpose.  Naturally,  statutes  giving  such  power 
should  also  impose  such  restrictions  as  would  insure  justice. 
One  should  not  have  power  to  condemn  another's  home, 
simply  to  use  it  for  his  home.  It  should  always  depend  upon 
a  superior  use  being  made  of  the  property  condemned.  This 
remedy  offers  a  most  effective  weapon  against  trusts.  But 
it  is  especially  effective  against  the  engrossment  of  large 
tracts  of  land. 

Why  should  not  a  gardener  or  a  fruit  grower  have  a 
superior  right  in  land  to  one  who  makes  little  or  no  use  of 
it?  Why  has  any  one  a  right  to  hold  idle  tracts  of  land 
anywhere  in  the  way  of  progress  and  improvement?  Nor 
would  I  limit  such  condemnation  to  the  piircliase  of  such 


174  RIGHT  AND  RICHES 

lands,  but  I  would  give  the  right  to  condemn  their  tempor- 
ary use,  upon  payment  of  the  rent  adjudged  to  be  fair. 
Had  the  Irish  this  power,  they  could  not  be  evicted  as  they 
have  been  to  make  room  for  pastures  and  game  preserves. 
The  most  effective  course  along  these  lines  is  that  pursued 
in  Australia  and  New  Zealand  where  the  State  has  con- 
demned and  subdivided  the  large  tracts. 

Many  industries,  as  they  expand,  are  obstructed  by  the 
owners  of  the  land  they  require,  though  it  may  be  almost 
worthless  for  all  other  purposes.  Access  to  waterfronts,  to 
railroads,  harbors,  roads,  is  often  controlled  by  the  title  to  a 
small  strip  of  land.  In  some  States  the  water  supplies 
needed  to  produce  crops  upon  arid  lands,  or  even  to  supply 
cities,  are  most  shamefully  allowed  to  be  appropriated  and 
wasted. 


CHAPTER  III. 
Units,  Monopoi,ies,  Public  Ownership. 

ECOGNIZING  the  universal,  primal  title  of  society, 
many  great  lovers  of  humanity  have  advocated  the 
common  holding  of  all  wealth  by  the  community — 
communism.  One  of  the  most  complete  exposi- 
tions of  a  plan'  to  carry  this  idea  out  is  Edward  Bellamy's 
"Looking  Backward."  But  there  are  radical  limitations  to 
the  practical  success  of  both  "common"  production  and 
"common"  use. 

Much  property  is  only  susceptible  of  use  individually. 
Clothing,  furniture,  houses  for  home  use  and  innumerable 
personal  belongings  are  valueless  if  not  devoted  to  the  spe- 
cial use  of  one  person  or  one  family.  We  may  adapt  our 
personal  property  to  our  special  requirements.  Then  again 
many  things  which  may  be  used  by  many  in  common  give 
much  greater  satisfaction  if  allotted  to  the  use  of  one  person. 
A  livery  horse  is  not  so  satisfactory  as  one  kept  and  trained 
to  the  usage  of  one  person.  A  hotel  is  not  like  a  home. 
Books  may  be  used  at  a  public  library  with  much  satisfac- 
tion, but  not  so  much  as  to  entirely  make  a  private  library 
needless. 

Then  again,  many  arts  arc  much  more  satisfactorily  pur- 
sued privately.  This  applies  to  a  large  degree  in  agriculture. 
The  cultivation  of  a  large  tract  with  hired  labor  is  seldom 
nearly  so  successful  as  when  subdivided  into  many  small 
tracts,  each  worked  by  its  owner  in  person.  Large  depart- 
ment stores  fail  to  give  the  satisfaction  to  shoppers  that 
small  tradesmen  are  able  to  give.  They  are  now  very  suc- 
cessful in  many  places,  and  are  able  to  make  many  econ- 
omies, and  sometimes  lower  prices,  but  it  is  very  likely  that 

175 


176  RIGHT  AND  RICHES 

they  will  be  replaced  soon  by  small  tradesmen  under  some 
co-operative  renting  arrangement. 

The  individual  by  working  under  his  own  direction  is 
able  to  give  a  character  to  his  work.  He  is  encouraged  to 
see  and  take  advantage  of  processes  and  methods,  impossible 
where  subject  to  the  control  of  a  distant  authority. 

But  there  is  a  limit  to  the  advantages  of  this  personal 
interest.  Many  working  together  are  enabled :  First,  to  di- 
vide the  various  processes  of  the  undertaking  so  that  each 
may  do  some  part  for  which  he  or  she  has  more  special  apti- 
tude. In  a  factory,  one  may  successfully  buy  stock,  another 
manage  machinery,  another  sell  output,  another  keep  the 
accounts.  Secondly,  by  combining  together,  they  may  pro- 
cure equipment,  impossible  for  single  individuals,  either  to 
])uy  or  to  use,  separately. 

The  ability  to  have  the  required  capital  to  furnish  equip- 
ment and  get  adequate  stock  to  work  upon  may  be  provided 
by  joint  stock  companies  or  corporations.  Each  individual 
puts  in  his  portions  or  shares  of  so  many  dollars  for  which 
he  is  supposed  to  share  proportionately  in  the  net  profits. 

But  corporations  do  not  pretend  to  divide  profits  with 
any  but  stockholders.  Those  who  operate  their  plants  are 
hired  at  the  lowest  market  price,  often  at  scant  living  wages, 
while  the  company  makes  large  profits.  Attempts  have  been 
made  to  correct  this  defect  by  forming  co-operative  societies, 
or  corporations  in  which  none  but  workers  hold  stock  or 
share  profits.  There  are  many  radical  difficulties  in  putting 
this  into  practice,  one  of  which  is  the  impossibility  of  agree- 
ing on  a  basis  of  division  in  proportion  to  what  workers 
contribute  to  output.  Some  have  attempted  to  give  a  stipu- 
lated salary  to  each  operative  and  then  divide  profits  in  pro- 
portion to  salaries.  This  may  be  somewhat  more  attractive 
than  simply  paying  higher  wages,  but  operatives  usually 
seem  to  have  little  appreciation  for  it,  regarding  the  profits 
divided  as  charity.     Some  co-operative  societies  have,  how- 


UNITS,  MONOPOLIES,  PUBLIC  OWNERSHIP     177 

ever,  been  measurably  successful.  That  is,  they  have  grown 
to  do  quite  an  extensive  business.  But  even  they  have  not 
included  consumers  in  their  sharing.  In  many  cases  they 
have  failed  through  cumbersome  methods  which  have  an- 
noyed patrons  and  have  failed  to  regard  the  necessities  of 
commerce. 

In  both  corporations  and  co-operatives  private  initiative 
tends  to  decrease  as  the  business  extends.  The  only  private 
initiative  which  is  likely  to  be  very  efifective  in  a  great  in- 
dustry is  the  controlling  stockholder.  The  Public,  may  with 
good  reason  expect  to  hire  managers  as  progressive  for 
publicly  operated  enterprises  under  reasonable  conditions. 

Competition  should  not  be  confused  with  Exce;lation. 

Competition  as  defined  by  Webster  has  two  phases  of 
meaning;  the  first,  striving  between  two  or  more  for  the 
same  thing  of  value ;  the  second  conveys  the  sense  of  un- 
selfish desire;  to  excel,  or  outdo  in  quantity  or  quality  of 
excellence,  but  Excel  at  ion  better  expresses  this  latter  mean- 
ing. 

The  theory  of  competition  is  that  each  concern,  animated 
by  a  desire  to  get  as  large  a  share  of  trade  as  possible,  or  all 
of  it,  will  cut  down  prices  and  try  to  undersell  the  other. 
This  implies  that  each  must  strive  to  cut  down  the  cost  of 
the  product  by  cutting  down  wages,  and  quality  of  output, 
too,  if  it  may  be  done  without  discovery.  This  selfish  com- 
petition, like  all  war,  when  carried  to  its  logical  conclusion, 
means  the  annihilation  of  all  but  one  of  the  contending  par- 
ties ;  in  other  words,  that  the  survivor  shall  be  a  trust  or 
monopoly.  This  is  a  consummation  worthy  of  the  primary 
impulse  of  competition. 

Selfish  competition,  like  everything  else  founded  on 
avarice,  is  a  failure.  Greed  is  not  a  healthy,  normal,  in- 
spiration. Its  natural  results  are  deception,  injury,  waste 
and  destruction. 


178  RIGHT  AND  RICHES 

Among  the  accompaniments  of  competition  are  wasteful 
advertising  and  dishonest  methods  of  getting  business. 
Grafting,  rebating,  and  various  methods  of  commercial  slug- 
ging of  rivals  ;  cutting  of  wages,  working  of  children,  sweat- 
shop production. 

In  order  to  defend  this  destructive  system,  instances  are 
cited  of  the  good  results  of  laudable  efforts  to  excel.  But 
that  is  not  competition.  The  effort  to  excel  is  indeed  the 
life  of  trade.  It  is  a  stimulant  to  industrial  progress  that 
should  be  encouraged.  But  selfish  competition  not  only 
does  not  encourage  "excelation"  but  is  most  destructive 
of  it.  Everything  that  tends  to  promote  the  highest  excel- 
lence in  products  should  be  supported. 

But  have  we  not  seen  abundant  evidence  of  the  worthless 
trash  resultant  from  strenuously  selfish  competition?  "Ex- 
celation" means  the  setting  up  of  standards  and  their  con- 
stant elevation  toward  the  highest  conceptions  of  excellence. 
But  it  does  not  in  any  sense  mean  the  reduction  to  the  low- 
est levels  of  price,  even  at  the  cost  of  honor,  honesty,  and 
the  destruction  of  the  best  standards  of  civilization  and  hu- 
manity. It  does  not  mean  getting  trade  irrespective  of  hon- 
est wages,  honest  goods,  or  honest  methods. 

"Excelation"  holds  up  to  child  and  adult  the  illustrious 
achievements  of  heroes  in  all  lines  of  science,  invention,  art 
and  progress.  The  evils  of  Trusts  are  not  overestimated, 
but  the  remedy  is  not  selfish  competition ;  for  Trusts  are  but 
the  culmination  of  competitive  greed,  not  alone  the  greed  of 
the  few  who  organize  them,  but  the  greed  of  the  whole  com- 
munity. 

If  the  present  heads  of  trusts  were  all  banished  and  the 
corporations  dissolved,  think  you  that  they  would  not  im- 
mediately spring  up  again  from  the  conditions  which  first 
produced  them? 

The  very  assumption  that  reasonable  prices  for  good 
service,  or  good  goods,  can  be  maintained  by  greed,  is  too 


UNITS.  MONOPOLIES,  PUBLIC  OWNERSHIP     179 

absurd  on  its  face  for  consideration.  But  the  evil  of  trusts 
is  not  that  they  put  an  end  to  selfish  competition.  Indeed, 
this  is  the  only  commendable  thing  that  may  be  said  of  them. 
This  result  is  like  that  of  the  termination  of  petty  tribal 
wars  by  the  triumph  of  some  more  powerful  chief ;  which  at 
least  brings  about  a  cessation  of  destructive  strife,  though  it 
does  not  institute  justice.  Greed  formerly  had  a  more  per- 
sonal expression  in  individual  "boorishness."  It  is  now  com- 
ing to  a  head,  is  more  nearly  ripe  for  expulsion.  It  is  mani- 
fested more  in  organized  form,  but  it  is  not  less  an  expres- 
sion of  individual  covetousness,  widespread  among  the  peo- 
ple. Our  President  has  wisely  said  that  greed  is  the  great- 
est danger  which  confronts  our  Nation.  Covetousness  is  as 
radical  a  sin  as  murder  and  must  be  so  recognized. 

In  order  to  compete,  the  apple  growers  in  some  dis- 
tricts put  a  few  good  ones  on  the  top  of  the  barrel.  In 
order  to  excel,  the  apple  growers  of  Hood  River,  Oregon, 
pack  the  barrel  straight  through  with  precisely  the  same 
kind,  with  the  result  that  Hood  River  apples  bring  almost 
double  on  the  New  York  market.  It  is  the  effort  to  excel 
that  has  made  the  products  of  different  cities  famous — the 
china  of  one,  the  cutlery  of  another,  the  butter,  lace,  linens, 
etc.,  of  others. 

The  excellence  guaranteed  by  certain  brands  of  hats, 
shoes,  collars,  etc.,  make  people  demand  them.  To  get  trade 
thus  is  praiseworthy,  but  the  attempt  to  compete  against 
honest  goods  by  offering  shams  and  shoddy  goods  at  low 
prices,  is  degrading.  The  right  of  the  consumer  to  procure 
his  needs  from  the  best  and  most  available  supply  is  incon- 
testable. No  infamous  tariff  law  framed  in  the  interests  of 
unjust  holders  of  natural  raw  materials — holders  of  forests, 
mines,  or  soil — whether  purporting  "to  protect  labor"  or  "to 
raise  revenue,"  can  be  justified  by  reason  or  experience.  Yet 
does  not  the  selfishness  of  the  majority  support  the  tariff? 


180  RIGHT  AND  RICHES 

God  made  trade  free.  Every  instinct  of  true  manhood 
is  for  removing  the  barriers  to  trade,  whether  they  be  ob- 
structions in  waterways,  unjust  carrier  charges  or  any  of 
the  despoihng  forms  of  taxation  of  trade  or  industry,  such 
as  tariffs,  Hcenses,  taxation  of  the  results  of  industry,  or  the 
repression  by  trusts  or  holders  of  idle  or  half-used  lands. 
Only  greed  of  the  most  destructive  and  vicious  type  desires 
to  curtail  output  and  use  of  things  desirable.  But  trusts 
would  not  be  wholly  prevented  by  removal  of  the  tariff. 
Many  are  international  in  scope. 

There  is  but  one  remedy  for  trusts.  This  is  to  give  peo- 
ple access  to  such  a  supply  of  each  product  as  would  best 
satisfy  the  demand.  If  monopoly  has  made  it  impossible 
for  private  interests  to  do  this  and  exist,  then  government 
should  take  the  field  and  offer  such  supply.  But  govern- 
ment will  not  unselfishly  provide  such  supply  until  tl^c  people 
it  represents  are  less  selfish.  Happily,  people  are  advancing 
along  this  line. 

Ruskin  had  a  beautiful  conception  of  this  problem,  even 
though  trusts  were  hardly  known  in  his  day.  He  com- 
plained of  inability,  by  reason  of  dishonest  trade  methods, 
to  procure  honest  wares  in  certain  lines — among  others,  art 
materials — and  suggested  that  the  government  produce  such 
things  of  fine  quality  and  offer  them  for  sale  at  a  liberal  per- 
centage of  profit,  stamped  with  the  quality.  Private  con- 
cerns could  not  then  hope  to  sell  other  than  a  good  quality 
of  such  things. 

No  more  reasonable,  simple  or  sure  solution  can  be  imag- 
ined for  the  trust  evil.  In  this  manner  cities  could  easily 
defend  themselves  from  such  abuses  as  an  ice  or  milk  monop- 
oly. This  remedy  would  not  only  restore  the  right  price, 
but  the  right  quality  of  such  things. 

Unitization  is  not  always,  however,  an  evil  per  se. 
Rather  it  is  often  the  only  rational  method  of  supply;  for 
good  service  in  many  lines  depends  on  the  uniting  of  service. 


UNITS,  MONOPOLIES.  PUBLIC  OWNERSHIP     181 

Telegraphs,  telephones,  railways,  postal  service  is  radically 
reduced  in  efficiency  by  division. 

Of  v^^hat  use  is  a  sleeping  car  if  it  does  not  carry  us  at 
least  all  night?  Or  a  telegraph  if  it  does  not  reach  all  wish- 
ing to  communicate?  If  there  are  two  telephones,  we  must 
pay  for  both  or  be  in  communication  with  subscribers  of  but 
one  system.  It  has  been  lately  officially  recognized  that  rail- 
roads may  not  be  successfully  operated  without  at  least 
making  a  unit  of  their  freight  service.  As  production  be- 
comes more  natural,  as  the  brotherhood  of  man  is  more  rec- 
ognized, the  means  of  supply  tend  the  more  to  become  units. 
Brotherhood  means  unity. 

Means  of  communication,  transportation  and  travel  are 
most  essentially  units.  Every  citizen  of  a  city  has  increasing 
need  of  telephone  connection  with  every  other  citizen  of  the 
same  city. 

The  excellent  article  on  "Trusts"  in  Cyclopedia  Ameri- 
cana points  out  this  natural  evolution  of  units  as  operated  by 
trusts,  and  the  further  fact,  that  this  "unitizing,"  being  the 
result  of  natural  and  deep-seated  laws,  cannot  be  suppressed 
by  stupid  superficial  laws. 

Every  American  has  with  the  progress  of  time  greater 
need  of  railroad,  mail,  telegraph  and  public  highway  com- 
munication, not  only  with  every  other  American,  but  with 
the  whole  world.  Automobiles  have  given  a  great  impetus 
to  this  desire  for  intercommunication. 

As  the  necessity  of  these  unit  services  grows,  so  the 
value  of  the  franchises  controlling  them  grows.  This  value 
should  naturally  accrue  equally  to  every  citizen.  But  during 
the  life  of  a  franchise  it  accrues  solely  to  its  owners. 

Consider  the  enormous  value  of  telegraph,  telephone  and 
railway  franchises.  These  should  be  recovered  to  the  pub- 
lic. At  greatly  reduced  rates  they  would  give  enough  net 
revenue  to  pay  all  expenses  of  government,  while  paying  the 


182  RIGHT  AND  RICHES 

same  wages  as  now,  if  it  were  desirable  to  raise  all  revenues 
so. 

There  is  no  moral  restriction  against  the  public  supply 
of  the  people's  needs,  even  though  it  do  make  worthless, 
franchises  and  concessions  of  vast  value,  based  on  excessive 
charges.  Would  it  be  wicked  for  you  or  me  to  privately  put 
on  the  market  a  supply  so  cheap  as  to  break  up  such  es- 
tablished interests?  Then  why  is  it  wrong  for  the  public  to 
institute  such  service? 

Why  should  a  certain  fictitious  value  be  recognized  as  a 
basis  for  the  rates  of  a  monopoly  service  corporation  simply 
because  there  are  a  few  innocent  stockholders,  without  re- 
gard to  the  million  innocent  patrons?  Rates  for  transpor- 
tation, communication,  electricity,  etc.,  should  be  gradually 
reduced  to  what  will  pay  liberal  interest  on  the  value  of  the 
tangible  physical  property  at  present  cost  of  its  duplication. 
The  German  Minister  of  Ways  recognized  the  justice  of  this 
principle  and  likewise  how  to  apply  it.  For  when  private 
ownership  of  railroads  became  detrimental  to  progress  and 
he  began  to  negotiate  for  their  public  purchase,  he  was 
asked  fictitious  prices,  he  at  once  began  preparations  for 
their  paralleling.  This  brought  the  "varmint"  out  into  the 
daylight.  Their  purchase  was  then  made  without  further 
difficulty,  but,  fortunately  for  Germany,  they  are  not  ham- 
pered by  a  Supreme  Court  as  we  are. 

When  this  new  and  just  principle  is  established,  it  will 
be  notice  to  the  purchasers  of  such  stock  not  to  expect  div- 
idends from  the  spoliation  of  the  people. 

.  Many  reformers  are  too  careful  to  state  their  respect  for 
the  prerogative  of  established  interests  and  for  property 
based  on  concession;  that  such  property  is  as  just  as  any, 
and  should  pay  no  more  taxes,  etc.  This  is  like  the  ante- 
bellum talk  about  slave-property.  Will  such  persons  state 
whether  the  standard  of  such  property  shall  be  based  on 
market  value  after  or  before  a  panic? 


UNITS,  MONOPOLIES,  PUBLIC  OWNERSHIP     183 

Mayor  Carter  H.  Harrison,  of  Chicago,  made  an  ad- 
dress to  the  Yale  law  school  on  "Some  Phases  of  the  Mu- 
nicipal Problem,"  in  which  he  laid  down  seven  principles  so 
axiomatic  that  they  Blight  be  termed  the  seven  civic  com- 
mandments.    They  are : 

"1.  Public  property  is  worth  to  the  people  dollar  for 
dollar  what  private  property  of  the  same  character  is  worth 
to  its  owner. 

2.  The  municipality  is  greater  than  any  corporation  to 
which  it  grants  rights. 

3.  The  demands  of  the  individual,  whether  it  be  a 
single  man  or  the  artificial  entity  known  as  a  corporation, 
must  be  subordinated  to  the  requirements  of  the  mass  of 
the  citizens. 

4.  Public  service  should  be  directed  toward  providing 
the  greatest  good  to  the  greatest  number. 

5.  The  commandment  'Thou  shalt  not  steal'  should  not 
be  applied  merely  to  the  property  of  individuals. 

6.  The  boodling  of  a  franchise  through  a  city  council 
is  no  less  dishonest  than  the  burglary  of  a  neighbor's  house. 

7.  The  corrupter  of  an  official  stands  no  higher  in  the 
sight  of  God,  nor  should  he  stand  higher  in  the  eyes  of  man, 
than  the  official  who  betrays  the  public  confidence  by  the  ac- 
ceptance of  a  bribe." 

The  revenue  which  service  plants  derive  is  not  the  only 
loss  to  the  public.  A  greater  loss  is  the  lack  of  good  serv- 
ice. Contrast  the  grade  of  service  given  in  a  $1.00  telegram 
and  a  2c  letter,  collected  and  delivered  by  men  who  pass  ex- 
amination for  ability.  Telegrams  are  delivered  by  boys  who 
can  scarcely  read  or  write  the  simplest  words,  coming  to  us 
so  dirty,  misspelled,  mispunctuated  that  their  meaning  is 
often  obscured. 

The  petty  charges  of  telegraph  and  express  concerns  for 
delivery  on  prepaid  service  is  often  enough  for  the  service. 

12— 


184  RIGHT  AND  RICHES 

It  is  needless  to  point  out  the  defects  of  service  to  the 
strap-hanging  passengers  of  car  lines ;  to  the  overcharged 
patrons  of  duplicate  telephone  systems,  or  users  of  the  in- 
termittent gas  supply  of  private  companies,  who  never  know 
whether  they  may  have  their  meal  wholly  cooked,  to  say 
nothing  of  the  bills. 

That  the  benefits  from  the  blessings  which  God  has  so 
plentifully  provided— the  rich  stores  of  nature  and  of  prog- 
ress— may  be  best  diffused  among  all  mankind,  it  is  impera- 
tive that  many  kinds  of  property  be  restored  to  the  common 
ownership  of  society;  that  it  be  controlled  and  operated  en- 
tirely independent  of  private  interest.  This  is  Public  Owner- 
ship, but  it  remains  to  some  extent  a  question  of  expediency 
what  should  be  so  undertaken. 

We  hear  that  without  private  enterprise  we  would  have 
no  gas,  electricity,  etc.  Public  Ownership  does  not  con- 
template the  discouragement  of  private  enterprise,  but  fran- 
chising of  corporations  does.  Did  the  railroads  adopt  safety 
inventions  until  compelled  to  do  so  by  law?  Do  they  yet 
lend  special  accommodation  to  the  small  coal  miner,  or  oil 
producer,  or  cement  manufacturer?  Why  can  an  old,  rich 
concern  in  New  England  compete  in  California  with  a  su- 
•perior  natural  supply  thousands  of  miles  nearer?  Simply 
because  young  enterprise  has  no  show  for  transportation 
over  private  ways  in  competition  with  vested  interests. 

Has  experience  proved  Public  Operation  a  success? 
There  are  some  apparently  great  failures ;  but  these  are  often 
farces.  The  absurdity  of  expecting  old,  rotten  barges  on  the 
Erie  Canal  to  compete  with  and  compel  a  reasonable  rate  on 
railroads,  when  these  barges  require  several  men  and  several 
mules  two  or  three  weeks  to  go  from  Buffalo  to  New  York 
with  less  than  two  carloads,  is  evident.  Nor  will  much 
more  be  accomplished  when  the  State  of  New  York  spends 
enough  on  the  canal  to  gridiron  the  State  with  railroads. 


UNITS,  MONOPOLIES.  PUBLIC  OWNERSHIP     185 

Four  modern  railroad  tracks  will  do  more  hauling  than  ten 
inland  canals.  Canals  are  a  relic  of  primitive  times,  unless 
they  allow  the  passage  of  ships  between  two  great  water- 
ways, as  the  Panama  Canal  purposes  to  do.  Various  States 
have  owned  pieces  of  railroad  which  were  failures.  They 
were  not  units.  But  there  are  many  great  successes.  The 
test  of  success  with  a  public  enterprise  is  not  that  it  make 
money  or  lower  the  tax  rate;  its  main  object  is  better  and 
cheaper  service. 

Toronto  is  well  satisfied  with  its  experiments  in  public 
ownership.  Its  waterworks  yield  a  profit,  though  the  charge 
has  been  reduced  to  $2.40  a  year  for  an  eight-room  house 
and  $4.20  for  a  10-room  house.  The  street  railways,  munici- 
pally owned,  but  leased  to  a  company,  paid  5  per  cent,  on 
the  stock  and,  in  addition,  turned  $235,447  into  the  city 
treasury  in  a  year.  Gas  in  Toronto  is  80  cents  a  thousand, 
and  the  city  has  decided  to  build  its  own  plant  unless  the 
price  is  reduced. 

One  direction  in  which  the  substitution  of  public  for 
private  monopoly  is  most  certain  to  be  a  success  is  by  elim- 
inating graft.  Most  of  the  official  graft  now  originates 
from  bribery  by  franchised  corporations  seeking  extensions 
of  privilege,  or  protecting  those  held. 

What  greater  success  could  be  expected  than  the  Postal 
Service?  Though  there  is  often  an  apparent  deficit,  we 
must  remember  that  the  mail  is  used  for  much  free  public 
service,  which  would  cost  millions  if  the  postoffice  were 
private.  Tons  of  public  documents,  seed,  etc.,  are  carried 
freely. 

What  better  example  of  success  could  be  had  than  the 
public  schools?  How  would  education  have  flourished 
without  this  great  boon  ?  It  needs  further  extension  in  free 
books  and  free  noonday  lunch  to  all  pupils,  not  as  charity, 
but  as  the  most  economical  means  of  supplying  these  needs. 


186  RIGHT  AND  RICHES 

After  two  years'  investigation  of  practical  results  both 
in  Europe  and  America,  the  Committee  of  the  National  Civic 
Federation  have  just  made  a  report  as  follows: 

"That  the  four  leading  public  utilities,  gas,  water,  electric  light 
and  power,  and  street  railways,  the  only  ones  they  investigated, 
cannot  be  suitably  regulated  by  competition.  'Legalized  and 
regulated  monopoly,'  whether  under  public  or  private  owner- 
ship, is  necessary.  Of  the  sort  of  industry  suitable  for  public 
ownership,  they  say  in  the  first  place,  'Undertakings  in  which 
the  sanitary  motive  enters  largely  should  be  operated  by  the 
public,'  since  it  is  dangerous  to  allow  any  one  to  make  a  profit 
out  of  a  public  utility  which  affects  the  health  of  the  citizens, 
and  the  public  operation  of  these  utilities  must  not  consider 
merely  the  profit  to  be  made.  The  Commission  believes  that 
franchises  should  be  granted  for  only  a  limited  time,  with  the 
provision  that  the  public  may  buy  them  out  at  a  fair  valuation. 
The  Commission  believes  in  the  widest  publicity  of  the  accounts 
of  public  service  corporations,  and  that  they  should  issue  new 
capital  only  with  the  permission  of  public  authority.  In  order 
to  isolate  municipal  undertakings  from  politics  the  Commission 
recommends  that  the  municipality  employ  an  executive  man- 
ager, and  that  the  finances  of  the  undertaking  be  separated 
from  those  of  the  rest  of  the  city.  The  municipally  owned 
business  should  be  as  distinct  from  the  rest  of  the  city  gov- 
ernment as  is  the  privately  owned." 

It  is  argued  against  public  ownership  that  it  incurs  debt. 
What  is  a  debt?  Something  that  absorbs  production.  Do 
not  franchised  corporations  absorb?  A  debt  may  be  event- 
ually paid  or  its  rate  reduced.  Franchises  continue  to  ab- 
sorb if  they  are  not  themselves  publicly  absorbed.  They  are 
bonded  for  several  times  the  cost  of  improvements  and  the 
patrons  must  pay  the  interest. 

But  is  there  not  danger  in  "Government  paternalism?" 
Is  not  this  going  into  business  contrary  to  the  traditions  of 
government  ?  Surely  it  is,  but  government  was  traditionally 
and  historically  instituted  to  allow  the  privileged  class  to 
prey  upon  the  rest  ol  mankind.  Happily  its  purpose  is  be- 
ing somewhat  changed.     Senator  Beveridge  said,  in  appeal- 


UNITS,  MONOPOLIES,  PUBLIC  OWNERSHIP    187 

ing  for  protection  from  the  blighting  effects  of  childhood 
labor,  "The  Constitution  was  made  for  the  people,  not  the 
people  for  the  Constitution."  It  is  not  so  certain  that  it 
was,  but  it  is  unquestionable  that  it  should  be  made  for 
them.  There  was  nothing  ever  done  by  man  that  may  not 
be  improved  in  the  light  of  experience. 

We  should  extend  our  advantages  and  comforts  in  ev- 
ery possible  way.  Our  cities  should  supply  transportation, 
telephones,  gas,  electricity.  The  time  is  not  far  distant  when 
they  will  supply  heat,  compressed  air  for  cleaning,  refriger- 
ation and  other  uses ;  when  they  will  cut  lawns,  plant  trees, 
remove  all  rubbish,  wash  all  streets,  conduct  funerals,  own 
cemeteries  and  do  innumerable  things  scientifically  and  ef- 
fectively. 

Why  should  not  all  the  people  in  common  do  everything 
for  all  the  people  which  they  can  do  collectively  more  effect- 
ively or  cheaply? 

There  should  be  no  attempt  to  make  a  profit  on  such 
service  as  is  to  the  common  interest  to  have  done  thoroughly. 

Whatever  is  demanded  in  something  like  equal  propor- 
tion by  all,  which  may  not  lead  to  waste  or  extravagance 
at  public  expense,  may  perhaps  be  free.  For  instance,  clear- 
ing of  garbage,  ashes,  sprinkling  of  streets,  etc. ;  providing 
play  grounds,  boating  lakes,  rest  stations,  drinking  foun- 
tains and  music  rooms.  But  broader  opportunities  are  good 
hard  roads,  reforesting  of  hills,  reclamation  of  swamps,  and 
the  general  beautification  of  city  and  country.  The  eft'ort  of 
philanthropists  as  well  as  municipalities  to  provide  cheap 
and  good  flats  in  congested  districts  is  a  mistake.  It  will  be 
much  more  easy  and  effective  to  relieve  the  congestion. 
What  creates  congestion? 

Manifestly  it  is  the  employment  given  near  such  old 
shacks  as  are  rented  cheaply.  The  remedy  is  to  move  the 
employment  to  the  suburbs  and  condemn  the  shacks  as  a 
place  for  parks.     The  money  some  generous  rich  men  are 


188  RIGHT  AND  RICHES 

spending  to  provide  model  tenements,  if  spent  to  induce 
industries  to  move  out  of  congested  centers,  would  relieve 
thousands  where  the  model  tenements  but  slightly  relieve 
few. 

High  buildings  tend  to  congestion.  Building  restrictions 
if  honest  are  of  great  benefit.  No  two  houses  after  the  same 
plan  should  be  allowed  in  the  same  block. 

Robert  Hunter  thinks  that  capitalism  (proprietorism) 
will  soon  go  the  way  of  "other  class  systems."  "Lawson," 
he  says  "sees  its  frenzied  finance;  Hughes  sees  its  robbery 
of  the  widow  and  orphans ;  Hearst  sees  its  political  treach- 
ery ;  Steffens  sees  its  political  perfidy ;  Miss  Tarbell  its  soul 
of  dishonor  and  hypocrisy ;  Robert  De  Forest  its  murderous 
tenements ;  Felix  Adler  its  slavery  of  the  children ;  Roose- 
velt its  poisonous  food  products."  Mr.  Hunter  sees  all  these 
things  at  once,  and  the  sight  has  driven  him  to  join  those 
who  demand  "the  social  ownership  of  the  instruments  of 
production." 

Public  ownership  is  an  effective  means  of  giving  to  labor 
good  wages  and  to  the  user  good  cheap  service. 

It  is  not  the  tendency  of  publicly  owned  utilities  to  raise 
rates  or  cut  wages  with  the  advent  of  prosperity.  Advan- 
tages of  science,  and  general  progress  inure  through  this 
channel  directly  to  the  benefit  of  all. 

Privately  owned  concerns  charge  "what  the  traffic  will 
bear."  When  invention  reduces  cost  it  does  not  imply  a  re- 
duced cost  to  patrons  of  private  service.  What  a  large  per- 
centage of  the  benefit  produced  by  such  noble  branches  of 
government  as  the  geological  survey,  harbor  and  river  im- 
provement, reclamation  service,  etc.,  are  absorbed  by  great 
private  monopolies  who  dominate  the  approaches  thereto ! 

The  extensive  building  of  highways,  now  so  generally 
agitated,  could  be  made  a  grand  blessing  to  humanity.  If 
15y  proper  legislation  the  principal  roads,  those  connecting 
the  greater  cities,  were  made  into  boulevards,  it  would  be 


UNITS,  MONOPOLIES,  PUBLIC  OWNERSHIP     189 

the  crowning  achievement  in  relieving  congestion.  But  to 
do  this,  the  land,  not  alone  for  a  broad  street,  but  from  two 
to  five  hundred  feet  adjoining,  should  be  acquired  by  the 
State,  and  platted  into  home  sites.  Then  with  a  publicly 
owned  car  line,  with  driveways,  cement  walks  and  lawns  on 
either  side,  the  grandest  residence  places  on  earth  would  be 
afforded,  and  could  be  sold  at  fair  prices  to  repay  the  cost. 

Public  ownership  and  operation  is  pre-eminently  scien- 
tific and  certain  of  success  with  all  forms  of  service- 
industries  which  are  units,  and  whose  output  is  not  diversi- 
fied and  intricate.  H  intelligently  administered,  it  restores 
to  society  its  natural  rent,  to  consumers  their  natural  prices,^ 
to  laborers  their  natural  wages.  Its  rapid  extension  is  only 
limited  by  our  blindness  to  our  mutual  interests  which  toler- 
ate the  crude  and  barbarous  forms  of  government  yet  pre- 
vailing in  most  of  our  States  and  municipalities,  where 
quantity  of  legislators  takes  the  place  of  quality  and  intel- 
ligence. Is  it  any  wonder  that  a  herd  of  barkeepers  and 
ignoramuses  should  fail  to  administer  anything  success- 
fully ? 

The  most  radical  evolution  tending  to  such  an  improve- 
ment of  government  as  will  hasten  publicly-furnished  utili- 
ties as  well  as  the  achievement  of  other  needed  reforms  is 
the  simplified  form  of  government  termed  the  "Commission 
plan  of  Government."  This  plan,  born  of  calamity,  and  the 
courage  of  less  than  a  score  of  citizens  of  real  public  spirit 
in  Galveston,  is  being  inaugurated  in  various  cities.  Its  suc- 
cess is  the  result  of  its  common-sense  simplicity.  A  board 
of  a  small  number,  preferably  three  to  seven,  is  appointed  by 
the  Governor  or  elected  at  large  in  the  city,  to  manage  the 
city's  affairs  as  would  the  directors  of  a  corporation.  They 
are  adequately  paid  by  the  city  for  their  work,  instead  of 
being  paid  by  bribe-givers.  What  could  be  more  absurd 
than  to  elect  members  of  a  city's  government  from  wards. 
The  interests  of  the  various  sections  of  a  city  need  no  dis- 


190  RIGHT  AND  RICHES 

tinctive  representation,  and  to  select  legislators  so  gives  the 
meanest  citizen  with  a  local  "pull"  a  sure  seat.  But  why  is 
it  more  intelligent  to  elect  State  Legislators  so,  or  to  have 
such  a  great  unwieldy  herd  of  them  ? 

This  new,  simple  form  of  government  recognizes  the 
natural  unity  of  the  community  to  be  governed.  It  was  the 
perception  of  vital  principles  which  caused  the  framers  of 
our  Federal  Constitution  to  preserve  the  integrity  of  the 
States.  Each  State  has  certain  conditions,  certain  moral 
and  social  problems  which  demand  peculiar  treatment.  Our 
nation  is  stronger  by  maintaining  the  integrity  of  States. 
Centralization  of  power  in  the  Federal  authority  is  extreme- 
ly dangerous.  Each  State  is  a  family  and  should  have  a 
separate  house  to  suit  itself.  But  wards,  townships,  legis- 
lative and  congressional  districts  have  no  individuality. 

A  city  is  a  unit  and  not  a  federation  of  wards,  and  to 
cut  it  up  into  parts  for  representation  is  to  nullify  the  ex- 
pression of  the  public  will,  by  a  complicated  division  of  re- 
sponsibility. As  well  might  a  railroad  select  a  director  from 
each  county  through  which  it  passes. 

Public  ownership  is  sound  in  theory  and  works  well  in 
practice,  but  with  all  its  possibilities,  no  one  reform  will  rec- 
tify the  dense  errors  which  centuries  of  darkness  have  estab- 
lished. The  utilities  which  at  this  time  appear  to  be  ripe  for 
public  ownership,  effect  but  a  minority  of  the  people.  Addi- 
tional measures  of  reform  are  needed,  the  most  fundamental 
of  which  is  an  aroused  public  conscience.  Corruption  and 
graft  have  grown  fat  on  the  unprecedented  rise  of  franchise 
values,  but  dishonest  or  ignorant  legislators  can  damage  the 
community  even  more  by  depriving  it  of  the  use  of  public 
conveniences  through  refusing  franchises  and  neglecting 
other  means  to  provide  them,  than  by  granting  franchises 
without  proper  restrictions.  To  prevent  effective  utilities 
by  lack  of  legislation  is  burying  the  public's  talent.  Mod- 
ern conveniences  benefit  the  public,  however  unjust  it  may 


UNITS,  MONOPOLIES,  PUBLIC  OWNERSHIP     191 

be  to  enrich  corporations  through  franchises  for  them.  Un- 
til pubHc  ownership  and  operation  is  possible,  franchises 
should  be  quickly  granted  under  such  terms  as  will  best  con- 
serve the  public's  interest. 

Los  Angeles  proposes  to  adopt  intelligent  measures  with 
regard  to  the  sand  In  her  river  bed,  to  which  she  holds  fee 
simple  title  through  an  ancient  Spanish  grant.  A  daily 
paper  says : 

"The  scheme  of  Contractor  Doran  to  hoist  sand  out  of  the 
river  bed  and  deliver  it  to  the  sand  haulers  at  a  stated  price  per 
load,  after  being  turned  down  by  the  city  council,  will  be  rec- 
ommended by  the  mayor  as  a  good  one  for  the  city  to  adopt. 

"The  mayor  has  sent  a  coinniunication  to  the  council  rec- 
ommending that  the  city  purchase  hoisting  machinery,  exclude 
teamsters  from  the  river  bed  and  charge  them  ten  cents  per  load 
for  gravel  delivered  on  the  banks. 

"About  1200  loads  of  gravel  are  hauled  out  of  the  river  bed 
every  day.  The  cost  of  the  machinery,  he  saj's,  would  be  only 
several  hundred  dollars.  The  city  would  make  $100  or  more 
per  day  out  of  the  enterprise,  prevent  the  undermining  of  bridge 
piers  and  dispense  with  the  numerous  conflicts  among  quarrel- 
ing teamsters  in  the  river  bed.  Greatest  stress  is  laid  on  the 
iinancial  feature,  as  the  city  needs  the  money." 

In  the  construction  of  the  great  Roosevelt  Dam,  which 
will  form  an  artificial  lake  covering  25.5  square  miles  of 
ground,  a  large  quantity  of  cement  was  required.  The  best 
price  quoted  to  the  Government  for  cement  delivered  was 
nine  dollars  a  barrel.  When  it  was  announced  that  the  Gov- 
ernment would  construct  a  local  plant  of  its  own  to  manu- 
facture the  cement  needed,  at  the  request  of  manufacturers 
further  bids  were  asked  for.  The  best  price  then  offered 
was  $4.98.  The  Government  plant  was  constructed,  and  for 
over  two  years  has  been  producing  cement  at  a  cost  of  about 
two  dollars  per  barrel.  The  toal  cost  of  the  plant  was 
$218,380.57.  It  has  already  paid  for  itself  and  will  save  on 
this  job  about  a  million  dollars.  The  same  plan  has  been 
adopted  at  the  Panama  Canal. 


192  RIGHT  AND  RICHES 

The  City  of  St.  Louis  is  arranging  to  supply  itself  with 
lime  by  kilns  in  its  Workhouse.  St.  Louis  not  only  uses 
large  quantities  of  lime  in  public  works,  but  in  purifying 
her  water  supply  by  a  system  perfected  through  the  efforts 
of  Mr.  John  A.  Wixford,  one  of  the  moderate  salaried  em- 
ployes in  the  Water  Department,  a  process  eminently  su- 
perior to  any  method  of  filtering  both  in  its  results  and 
cost. 

Until  social  conditions  advance  far  enough  beyond  their 
present  status,  it  will  be  impossible  for  the  people  to  under- 
take the  collective  performance  of  all  functions  which  now 
require  franchises  or  other  private  control  of  natural  or 
social  opportunities.  It  is  then  only  a  question  of  what  so- 
ciety is  now  ready  to  undertake  to  do  collectively.  This 
depends  on  the  degree  of  civic  progress  in  each  community. 
As  men  come  to  have  more  benevolence  they  will  begin  to 
lose  that  inverted  conception  of  wealth  which  rests  on  hin- 
dering others'  use  of  it,  upon  the  power  given  by  it  to  com- 
mand others,  and  they  will  gain  the  true  idea  of  its  real 
value,  which  is  efficiency  to  contribute  happiness. 


CHAPTER  IV. 

TiTht  AND  Time. 

HAT  is  the  purpose  of  giving  private  title  to  prop- 
erty? That  it  may  be  more  effectively  used. 
Naturally,  then,  no  title  should  run  for  a  longer 
period  than  a  lifetime;  for  why  should  we  extend 
title  to  the  dead?  The  Chinese  and  some  Indians  bury  his 
property  with  the  owner.  Is  it  more  reasonable  to  allow  its 
disposal  by  him  after  his  death? 

All  ownership  should  be  limited  to  the  lifetime  of  the 
grantee.  This  is  not  an  untried  theory.  Patents  are  granted 
for  only  a  limited  term  by  every  government.  vSo  are  copy- 
rights. In  many  countries  they  are  based  on  the  life  time  of 
the  author;  in  some  they  extend  to  the  time  his  youngest 
child  attains  a  certain  age.  In  most  States  franchises  for 
public  utilities  and  corporate  charters  are  only  granted  for 
a  limited  term  of  years.  After  a  great  struggle,  Illinois  has 
finally  secured  a  law  limiting  franchises  to  a  shorter  term  of 
years  than  previously  given. 

Why  should  the  title  to  land  be  perpetual? 

We  grant  that  he  who  goes  into  the  wilderness  as  the 
pioneer  deserves  credit.  But  no  one  can  do  a  service  to  com- 
pensate all  future  generations  for  the  loss  of  their  birth- 
right. Has  any  certain  generation  the  sole  right  to  the 
earth?  Has  not  each  child  born  an  equal  claim  to  enjoy 
the  bounties  of  nature? 

What  if  William  Penn  had  formed  a  close  corporation 
for  his  heirs,  and  held  to  Pennsylvania,  and  continued  until 
now  to  collect  rent  upon  all  land  in  the  State? 

But  why  not  as  well  one  hold  title  as  for  a  considerable 
number  of  men  to  do  so?     The  Anthracite  Coal  Trust  col- 

193 


194  RIGHT  AND  RICHES 

Iccts  millions  upon  millions  on  a  small  fraction  of  the  State. 
Shall  this  be  perpetual  ? 

While  the  same  principle  holds  good  with  Wealth-prop- 
erty— that  its  title  should  not  extend  beyond  the  lifetime  of 
its  producer,  yet  nature  enforces  the  law  as  to  such  prop- 
erty. Only  an  infinitesimal  portion  of  it  endures  even  for 
the  fourth  of  a  lifetime.  How  much  wealth  is  there  to-day 
more  than  ten  years  old  ?  Many  houses,  some  roads,  scarce- 
ly any  railroads — they  must  nearly  all  have  had  new  ties 
and  rails — no  grain,  very  little  furniture  or  fabrics.  In 
forty  years  almost  all  such  things  become  memories. 

Hence,  in  limiting  the  term  of  ownership  we  need  but 
look  to  Concessions  and  Credits.  Here  alone  we  have  per- 
manence. Lands  which  were  granted  hundreds  of  years 
ago,  are  to-day  held  by  descendants,  and  in  many  cases 
growing  more  and  more  valuable. 

There  was  litigation  in  St.  Louis  to  establish  ownership 
on  account  of  the  alleged  possession  of  the  property  by  an 
ancestor  more  than  two  centuries  previous.  Had  evidence 
been  sufficient,  the  claim  should  have  been  recognized  by 
our  courts.  Is  this  not  worse  than  burying  property  with 
the  dead  ? 

The  remedy  is  very  simple.  The  same  remedy  was  pro- 
posed for  freeing  the  negroes,  that  all  born  after  the  plan 
went  into  efifect  should  be  free.  So  let  us  recognize  that 
each  child  is  born  with  an  inalienable  right  to  the  freedom 
of  his  pro  rata  of  land  and  opportunity. 

The  termination  of  title  to  homes  and  farms,  when  they 
are  of  such  small  size  as  to  be  personal  in  their  nature,  need 
not  disturb  the  occupants  but  simply  come  about  by  a  con- 
cession tax  on  the  rental  value.  This  could  be  put  into  effect 
by  gradual  increase  in  the  ground  tax  to  somewhere  near 
the  rental  value  of  the  land,  excluding  improvements.  Im- 
provements of  a  permanent  nature,  such  as  drainage,  etc., 
migfht  also  be  considered  to  merge  into  the  land  value  after 


TITLE  AND  TIME  195 

an  average  lifetime.     Railroad  grades,  tunnels,  canals,  etc., 
become  fixtures. 

Bernard  Shaw,  in  comparing  copyright  protection  with 
land  title,  brings  out  the  absurdity  of  the  former.     He  says : 

"Property  in  land  was  instituted  in  order  to  secure  to  the 
tiller  of  the  soil  the  reward  of  his  labor. 

"Property  on  the  land  has  the  efifect  of  entirely  preventing 
the  tiller  of  the  soil's  getting  anything  out  of  it.  He  gives  all 
the  rest  to  absolute  idlers. 

"We  go  on  in  the  old  way  and  we  do  not  revise  it. 

"It  is  perfectly  evident  to  me  that  if  we,  by  some  means 
or  other,  could  be  thrown  into  a  state  of  chaos,  and  if  to-mor- 
row we  could  sit  down  and  work  out  new  institutions,  we  would 
not  dare  to  institute  property  in  land  at  the  present  time.  It 
would  be  the  act  of  madmen. 

"Property  in  books,  however,  is  a  matter  of  recent  insti- 
tution, and  we  find  this  property  strictly  limited.  You  don't 
say  to  a  man  who  has  written  a  particular  book:  'This  book 
shall  be  yours  and  your  heirs'  forever.'  What  you  say,  very 
sensibly  is,  'We  will  allow  you  to  have  the  privilege  for  forty- 
two  years,  or,  if  you  live  longer,  for  seven  years  after  your 
death,  or   rather,  whichever   period  shall   be   the   longest.' 

"  'It  is  quite  useful  for  Socialists  who  are  engaged  in 
propaganda  to  remind  people  that  in  this  very  important  de- 
partment of  production,  the  production  of  works  of  art,  they 
have  actually  applied  the  strictly  Socialistic  method  of  settling 
property,  that  instead  of  giving  a  man  an  unlimited  period, 
they  give  him  title  for  a  limited  period,  and  then  throw  the 
book  into  the  common  stock.' 

"  'At  the  end  of  that  period  all  these  extraordinary  works 
of  a  man  will  be  thrown  into  the  common  stock  and  another 
person  may  print  his  books.'  " 

The  Generation's  Rights. 

I  know  that  inheritance  is  a  sacred  institution.  It  ex- 
isted away  back  in  the  days  of  Abraham.  Those  in  power 
have  fostered  the  idea.  Until  recently,  they  fixed  the  laws 
all  over  the  world  so  that  their  children  should  inherit  the 


196  RIGHT  AND  RICHES 

government.     Printing  presses  and  public  schools  are  break- 
ing in  on  that  prerogative. 

But  property,  the  greatest  force  to  compel  or  govern 
people,  is  still  universally  considered  a  right  for  people  to 
inherit.  It  is  plausible.  My  boys  or  girls  are  the  dearest  on 
earth.  Why  should  they  not  have  what  is  mine  when  I  am 
gone?  Ah,  but  how  about  others'  dear  sons  and  daugh- 
ters? They  "have  a  birthright,  too,  whether  their  ancestors 
were  money  makers  or  not.  And  how  do  you  know  that 
what  you  have  now  may  be  kept  for  your  children  when  you 
are  gone?  Were  it  not  better  to  leave  less,  and  to  leave  a 
better  system  of  society  and  government  for  them  to  live 
under?  One  that  would  guarantee  them  a  useful  education 
and  a  broad  opportunity?  To  love  those  near  to  us  is  well, 
but  "do  not  even  publicans  the  same?" 

Are  all  men  born  free  and  equal  ?  What  does  this  mean  ? 
Not  that  they  are  equal  in  stature,  or  intellect,  or  talents,  but 
equal  in  rights.  Our  government  is  supposed  to  be  based  on 
this  principle,  but  does  our  government  carry  it  out?  In 
some  matters  of  sentiment  this  principle  is  enacted  into  law. 
All  have  the  right  to  trial  by  jury,  all  have  the  right  of  free 
speech,  all  have  the  right  to  work  for  a  living,  if  the  priv- 
ileged few  give  them  the  opportunity. 

If  there  is  to  be  a  race  or  contest  for  a  prize  of  equals, 
all  start  at  once  on  even  ground  and  have  an  equal 
weight.  If  there  is  not  equality,  some  handicap  is  put  on 
the  superior  ones.  A  true  sportsman  would  hold  an  athlete 
of  a  superior  class  in  contempt  who  should  enter  a  race  with 
inferiors  and  then  try  to  use  some  advantage.  In  the  race 
of  life  do  all  start  equally?  How  many  poor  boys  strug- 
gling, suffering  from  hunger,  weather  exposure  and  lack  of 
education  and  equipment  can  testify  to  the  negative !  How 
many  poor  girls  are  growing  into  womanhood  without  any 
of  those  things  that  are  requisite   for  comfort  and  refine- 


TITLE  AND  TIME  197 

ment,  how  many  who  are  even  suffering  for  bread !    Robert 
Hunter  says : 

"Summed  up  in  a  sentence,  the  chief  cause  of  the  prevail- 
ing poverty  of  the  adult  poor  is  the  fact  that  they  are  handi- 
capped by  the  effects  of  a  poverty-cursed  childhood.  As  some- 
one has  said,  'the  destruction  of  the  poor  is  their  poverty.'  The 
poor  child  who  survives  the  appalling  slaughter  of  the  inno- 
cents— 307  deaths  per  thousand — is  too  frequently  marked  for 
life  by  the  insufficient  food  and  care  which  brought  his  fellow 
sufferers  of  the  poor  home  to  the  grave.  Here  is  'race  suicide' 
in  its  most  appalling  shape.  And  inasmuch  as  most  of  the 
deaths  from  disease  among  the  infantile  population  in  poor 
quarters  are  undoubtedly  due  to  insufficient  nourishment,  the 
food  problem  is  the  most  pressing.  'There  is  at  least  one 
European  municipality  which  has  solved  this  problem  of  the 
feeding  of  school  cliildrcn  in  a  delightful,  direct  and  simple 
way.  The  city  of  Vercelli,  Italy,  has  made  feeding  as  compul- 
sory as  education.  Every  child,  rich  or  poor,  is  compelled  to 
attend  the  school  dinner  provided  by  the  municipality,  just  as  it 
is  compelled  to  attend  the  school  lessons.'  " 

How  many  babies  have  not  sufficient  clothes  to  prevent 
suffering!  How  many  die  from  lack  of  ordinary  care  and 
good  food,  through  poverty,  while  others  are  born  with  title 
to  tracts  miles  and  miles  in  extent!  Yes,  while  even  dogs 
have  thousands  squandered  on  them ! 

I  do  not  plead  for  equality  between  the  ignorant  and  the 
learned,  between  the  filthy  and  the  clean,  betv^een  the  boor- 
ish and  the  refined,  in  the  ordinary  social  intercourse.  I  do 
not  wish  to  hold  down  the  man  of  great  capacity  to  the  level 
of  him  who  can  only  shovel.     I  only  plead  for  an  equal  start. 

What  more  right  has  the  tender  babe  of  a  Gould  or  a 
Carnegie  than  the  child  of  him  who  gets  but  nine  dollars  a 
week  for  shoveling?  The  Carnegie  or  Henry  B.  Hyde  or 
Krupp  deserves  more  than  he  who  can  only  push  a  wheel- 
barrow, but  where  does  one  babe  derive  a  greater  right  than 
another?  You  say  from  the  right  of  inheritance,  but  what 
proof  have  you  that  inheritance  is  right  ?     That  we  are  used 


198  RIGHT  AND  RICHES 

to  it,  and  are  not  shocked  by  it,  is  true;  but  we  should  be, 
for  it  is  the  monster  crime,  though  not  yet  recognized. 
A  prominent  minister  recently  said : 

"It  is  rather  a  hopeful  commentary  on  the  decency  of 
human  nature  that  the  actual  abuse  of  children  now  excites 
among  civilized  people  the  greatest  abhorrence  and  resentment. 
The  neglect  of  children  and  the  sinful  iniquities  of  society  of 
which  they  are  constantly  the  victims  do  not  seem  to  have  made 
an  appeal  to  public  sentiment  sufficiently  strong  to  have  cor- 
rected them. 

"In  a  hearing  at  Scranton  before  the  arbitration  committee 
appointed  to  investigate  the  complaints  of  the  miners,  it  was 
testified  that  little  girls  no  older  than  11  and  13  years  were  em- 
ployed at  night  work  in  mills,  for  which  they  received  65  cents 
for  twelve   hours  labor. 

"Now,  let  no  man  or  woman  who  looks  into  the  laughing 
eyes  of  children  who  are  well  clothed  and  fed  and  pampered  by 
fortune  forget  that  the  system  which  consigns  other  children  to 
toil  and  privation  is  desperately  wicked.  Let  them  not  lay  the 
flattering  unction  to  their  souls  that  when  they  have  satisfied 
the  wants  and  gratified  the  desires  of  their  own  darlings  they 
have  discharged  their  whole  duty.  There  is  not  a  principle  of 
justice  in  all  the  universe  of  God  that  sanctions  the  inequalities 
which  cause  certain  children  to  abound  in  luxury  and  others  to 
suffer  from  poverty." 

Can  a  baby  before  it  crawls  give  consideration  to  the 
community  for  more  than  its  common  share? 

If  one  should  be  allowed  to  take  what  was  owned  by  his 
parents,  when  they  have  property,  why  should  he  not  be 
compelled  to  pay  his  parents'  debts,  if  they  die  bankrupt  ? 

All  would  say,  "Oh,  he  is  not  responsible  for  his  fath- 
er's failure."     Neither  is  he  for  his  success. 

What  should  be  done  with  estates,  should  they  be  dis- 
tributed to  the  poor?  No.  not  directly.  That  would  be 
too  drastic  and  very  likely  the  poor  would  be  harmed  in- 
stead of  benefited  and  the  children  of  the  rich,  being  used  to 
luxury,  would  suffer  too  greatly.  I  do  not  contemplate 
when  Mr.  Brown  dies  to  go  into  his  home  and  sell  it,  to- 


TITLE  AND  TIME  199 

gether  with  its  library  and  furnishings,  and  put  his  children 
into  a  public  home. 

No,  I  simply  propose  to  go  ahead,  along  the  line  on 
which  we  have  started  out,  and  to  broaden  as  we  go  along. 
We  made  the  great  initial  step  when  we  established  free 
schools.  This  recognized  the  common  right  of  the  child  to 
education.  Now  some  "anarchists"  in  school  managements 
in  different  cities  have  recognized  the  child's  right  to  eat, 
and  have  arranged  to  give  a  good  warm  meal  to  those  com- 
ing to  school  hungry. 

"Suffer  little  children  to  come  unto  me,  and  forbid 
them  not,  for  of  such  is  the  Kingdom  of  Heaven."  What  a 
narrow  construction  we  put  upon  the  Master's  words  when 
we  are  satisfied  with  simply  providing  Sunday-schools  and 
churches  where  the  child  may  go  //  it  happens  to  have  any- 
thing to  wear,  and  when  we  neglect  every  earthly  provision 
for  its  comfort.  No  saying  of  the  Master  is  more  obviously 
true  than  the  above.  The  child  thought  is  receptive  of  God's 
truth,  and  the  first  duty  of  the  Christian  is  to  strive  to  open 
up  to  it  the  gates  of  this  kingdom  of  harmony  not  only  to 
his  own  children,  but  all  children ;  not  alone  by  offering 
them  good  words,  but  by  striving  to  see  their  needs  sup- 
plied. 

In  many  States  the  child's  common  right  to  correction 
and  training  to  keep  it  out  of  crime  is  being  recognized,  and 
juvenile  courts  are  established. 

Laws  are  being  made  and  enforced  to  prevent  those  un- 
der fourteen  from  being  put  to  hard  labor.  They  should  be 
taught  to  be  useful  and  happy.  They  should  have  pleasant 
surroundings.     They  need  not  own  them  but  use  them. 

No  child  should  be  compelled  to  live  in  pent-up  tene- 
ments. Cities  should  secure  ground  for  cottages  and  make 
them  available  to  all  children.  Private  builders  should  not 
be  allowed  to  build  without  sanitary  and  attractive  features. 
Bad   tenements   should   be   torn    down.      Baths   and   gym- 

13— 


200  RIGHT  AND  RICHES 

nasiums,  gardens  for  them  to  work  in,  play  grounds  to  play 
in,  laboratories,  and  machine  shops  and  studios  to  work  in, 
should  be  available  to,  and  urged  upon  all  children. 

Gov.  Folk  of  Missouri,  in  speaking  of  the  working  of 
the  compulsory  education  law  in  Missouri,  pointed  out  what 
he  declared  to  be  a  serious  defect  in  it : 

"This  defect,"  said  Gov.  Folk,  "exists  in  practically  all  of 
the  States  that  have  compulsory  education.  The  defect  is  in  the 
provision  which  permits  a  child,  'the  sole  support  of  indigent 
parents,"  to  be  relieved  from  school  attendance  and  allowed  to 
labor. 

"Recently.  I  went  through  some  of  the  great  factories  of 
St.  Louis  to  investigate  the  workings  of  this  law.  While  the 
child-labor  law  is  enforced,  I  found  many  instances  of  little 
girls  and  boys  of  9,  10  and  11  years  of  age  at  work.  In  each 
of  these  cases  it  was  claimed  that  the  child  was  the  only  support 
of  a  parent.  Experience  has  demonstrated  that  the  majority  of 
claims  for  exemption  are  not  bona  fide,  and  are  the  product  of 
parental  advice  rather  than  necessity. 

"However  it  may  be,  I  believe  if  a  parent  is  so  poor  that  he 
must  depend  for  support  upon  the  labor  of  an  infant  child,  he  is 
poor  enough  for  the  State  to  support  him  as  a  pauper.  He 
should  not  be  allowed  to  destroy  the  child  mentally,  physically 
and  morally,  as  is  the  usual  result  when  children  are  permitted 
to  work  in  factories  at  such  tender  ages.  It  is  far  inore  im- 
portant that  the  child  should  be  given  an  education,  and  be 
made  a  useful  citizen,  than  that  the  parent  eke  out  a  miserable 
existence  through  the  meager  earnings  of  an  infant  when  the 
parent  can  as  well  or  better  be  supported  by  the  State." 

Bernard  Shaw  says  that  one  of  the  plainest  duties  of 
Society  is  to  pension  widows.  This  principle  is  well  recog- 
nized in  the  institution  of  alimony.  We  insist  that  a  man 
who  has  married  a  woman,  support  her  until  she  has  by 
some  misconduct  forfeited  that  claim.  Then,  by  what  sort 
of  reasoning  can  Society  shirk  this  responsibility  when  the 
man  dies  leaving  her  without  estate? 

Among  their  first  lessons,  children  should  be  taught 
citizenship — their  mutual  rights,  duties  and  responsibilities. 
They  should  come  early  and  naturally  into  the  habit  of  prac- 


TITLE  AND  TIME  201 

tical  organization  and  collective  action  so  that  they  may  be 
able  to  assert  themselves  against  professional  politicians. 
Progress  is  rapid  in  child  culture  and  protection.  Burbank, 
inspired  master  of  floriculture,  would  naturally  perceive  the 
truth  of  child  culture  and  affirms  environment  to  be  all  im- 
portant. Nathan  Strauss,  noble  Hebrew,  recognized  the 
child's  right  to  pure  milk.  Many  others  are  looking  out  to 
provide  them  fresh  air  and  enjoyment  of  nature.  But  from 
where  is  the  money  to  come  to  give  the  dear  innocent  ones 
the  wholesome  environment  which  is  their  right?  That 
brings  us  to  the  other  side  of  the  question.  Why,  by  the 
most  natural  reasoning  possible,  from  the  excessive  estates 
left  by  the  rich  to  their  heirs. 

A  small  boy  inherits  the  Field  millions,  including  vast 
commercial  enterprises  where  thousands  are  employed.  This 
is  a  misfortune  to  the  child.  There  are  two  weak  ends  to 
life,  as  we  now  live.  The  child  and  the  aged  need  care,  and 
it  must  come  from  those  in  intermediate  life  who  are  strong, 
and  able  to  provide  for  more  than  their  own  personal  needs. 

There  are  two  conditions  of  life  conducive  to  vice  and 
crime,  excessive  wealth  and  poverty.  Why  not  somewhat 
level  these  extremes?  I  believe  in  inheritance,  but  it  is  the 
inheritance  by  one  generation  of  the  progress  of  previous 
ones ;  the  inheritance,  by  the  weak  and  helples,s  child,  of  the 
care  and  protection  of  sturdy  manhood  and  womanhood ;  the 
inheritance  by  age  of  enough  for  support  whether  or  not 
it  has  had  sufficient  acquisitiveness  to  accumulate  and  hold 
on  to  it. 

Elbert  Hubbard  has  said:  "So  long  as  men  accumulate 
wealth  that  their  children  shall  not  work,  and  so  long  as  the 
rottenness  of  gentility  shall  be  unperceived,  so  long  will  one 
generation  weaken  itself  by  consuming  what  another  has 
created. 

"The  use  of  power  to  form  a  Superior  Class  is  the  one  thing 
that  has  wrecked  the  world  and  made  calamity  so  long  of  life. 
This  Superior  Class  is  always  a  menace,  always  a  curse.  Its 
distinguishing   feature    is   to   exclude — it    is   ossified    selfishness. 


202  RIGHT  AND  RICHES 

"The  Superior  Class  is  a  burden.  No  nation  ever  survived 
it  long,  none  ever  can.  This  volunteer  Superior  Class  has 
always  thought  that  good  is  to  be  gained  by  avoiding  labor; 
by  wearing  costly  and  peculiar  clothing;  by  being  carried  in  a 
palanquin,  by  being  waited  on  by  servants;  by  eating  and  drink- 
ing at  midnight;  by  attaining  a  culture  beyond  the  reach  of 
most;  by  owning  things  that  only  a  few  can  enjoy — these  are 
the  ambitions  of  the  self-appointed  Superior  Class. 

"The  Superior  Class  lives  by  its  wits,  or  on  the  surplus 
earned  by  slaves  or  men  that  are  dead.  When  you  live  on  the 
labor  of  dead  men  you  are  dead  yourself.  It  can  never  be  done 
away  with  through  violence  and  revolntion.  This  has  been 
tried  again  and  again.  Revolution  is  a  surgical  operation  that 
always  leaves  the  roots  of  the  cancer  untouched.  Another 
excrescence  sprouts,  and  one  Superior  Class  is  exchanged  for 
another. 

"No,  the  desired  end  can  never  come  through  threat  and 
violence — -that  is  where  men  have  stumbled  since  history  be- 
gan. The  millennium  will  come  in  this  way,  men  will  re- 
fuse to  enlist  as  soldiers  for  any  other  reason  than  to  protect 
a  threatened  invasion  of  their  homes. 

"There  is  no  health  in  idleness,  there  is  no  joy  in  selfishness. 
The  Superior  Class  is  simply  a  huge  mistake — it  is  to  be  pitied, 
not  envied,  and  when  our  children  and  our  children's  children 
know  this,  and  are  willing  to  do  unto  others  as  they  would  be 
done  by,  one  generation  will  then  conserve  and  hold  the  good 
that  another  has  gained." 

Here  is  a  clear  recoonition  of  the  important  truth  so  sel- 
dom recognized,  that  the  enslavement  of  the  masses  comes 
not  from  some  persons  in  the  oppressing  class,  but  from  the 
innate  selfishness  and  lack  of  love  among  the  masses.  To 
destroy  the  aristocrats  never  brought  freedom.  As  St.  Paul 
states  it :  ''For  we  wrestle  not  against  flesh  and  blood  but 
*     *     *     against  the  rulers  of  darkness  of  this  world." 

What  is  the  community's  interest  in  great  estates?  They 
are  accumulated  (if  legally)  through  the  growth  of  the 
commtmity  in  population,  wealth  or  intelligence;  perhaps 
partially  through  some  bright  ideas  or  inventions  of  their 
builders.    But  bright  ideas,  in  a  measure,  belong  to  the  pub- 


TITLE  AND  TIME  203 

lie.  They  are  the  outgrowth  of  our  civilization.  The  men 
who  give  us  the  greatest  thoughts  seldom  receive  much 
compensation  in  property.  Hence  such  ideas,  when  their 
originators  have  been  duly  compensated,  naturally  revert  to 
the  public. 

But  it  may  be  asked,  if  the  unearned  increment  of  land 
and  franchises  are  restored  to  Society  through  taxation  upon 
an  assessment  based  solely  upon  those  elements  of  property 
value,  what  then  is  there  left  to  descend  from  one  generation 
to  another? 

While  assessment  may  be  entirely  limited  to  the  conces- 
sion element  of  property,  yet  it  will  always  be  impossible  to 
take  the  whole  of  concession  value  through  taxation. 

But  aside  from  all  such  interest,  there  is  another  kind  of 
property  of  almost  equal  extent,  which  is  handed  down  from 
generation  to  generation.  This  is  the  great  volume  of 
Credit.  In  the  chapter  on  Credit  I  try  to  analyze  this  form 
of  property.  It  arises  from  a  legitimate  source,  but  after 
the  lapse  of  years  grows  to  be  a  veritable  vampire  on  in- 
dustry. The  Rothschild  estate,  whose  origin  was  the  price 
of  graft  and  crime  of  the  most  diabolical  order,  has  lived  and 
grown  fat  on  extortion  and  corruption,  generation  after  gen- 
eration, and  still  goes  on  sucking  the  life  blood  of  many  na- 
tions. 

Credit  as  a  means  of  exchange  is  a  useful  servant  of 
civilization,  but  its  fruit  belongs  only  to  him  who  has  earned 
it  by  abstention. 

Credit  which  represents  the  value  of  goods  actually  be- 
stowed upon  the  debtor,  is  in  practical  effect  a  latent  title 
in   such   capital   and   entitled   to   its   share   of  its    fruitage. 

How  much  credit  is  liut  the  awful  incubus  of  debt  to 
those  who  owe,  for  which  they  slave  from  generation  to 
generation!  Millions,  billions  of  debt  is  saddled  upon  the 
producing  class  by  manipulation  of  legal  tender,  and 
through  stock  jobbing  and  real  estate  speculation. 


204  RIGHT  AND  RICHES 

The  Israelites  recognized  in  a  crude  way  this  debt- 
slavery,  and  tried  to  remedy  it  through  their  Jubilee  Year 
law  which  canceled  debt.  But  such  laws  cannot  distinguish 
between  the  true  credit  and  the  false. 

There  is  no  way  apparent  except  to  liquidate  it  in  some 
measure  at  the  death  of  the  holder  through  inheritance  tax. 
Many  States  have  a  measure  of  taxation  on  estates.  Men 
of  the  greatest  business  ability  endorse  it. 

The  unequivocal  declaration  of  three  of  America's  fore- 
most financiers  and  men  of  affairs  in  favor  of  a  liberal  in- 
heritance tax  was  the  salient  feature  in  the  recent  delibera- 
tions of  the  Civic  Federation. 

Andrew  Carnegie  and  August  Belmont  strongly  advo- 
cated the  inheritance  tax  and  so  did  Melville  E.  Ingalls. 

An  income  tax,  Mr.  Carnegie  said,  "was  impossible," 
but  he  believed  with  Mr.  Gladstone,  "that  it  made  a  nation 
of  liars." 

As  to  a  graduated  inheritance  tax,  Mr.  Carnegie  said  he 
advocated  that  "as  the  best  means  of  getting  something  like 
a  better  distribution  of  wealth  than  we  can  by  any  other 
means." 

"The  growth  of  the  American  public,"  Mr.  Carnegie 
continued,  "that  is,  the  basis  of  great  estates — the  public — 
is  the  partner  in  every  enterprise  where  money  is  made  hon- 
orably. I  say  the  community  fails  in  its  duty,  and  our  legis- 
lators fail  in  their  duty,  if  they  do  not  exact  a  tremendous 
share,  a  progressive  share — no  idea  of  ever  making  his 
children  paupers,  no  idea  of  interfering  with  his  right  to 
leave  them  a  competence — of  those  millions  which  would 
really  have  a  different  name  from  property. 

"My  experience  is  that  I  would  as  soon  leave  a  curse  to 
my  boy  as  the  almighty  dollar.  There  are  exceptions  every 
now  and  then,  but  we  must  legislate  not  for  exceptions ;  we 
must  legislate  for  the  general  good." 


TITLE  AND  TIME  205 

To  tax  gifts  and  inheritances  is  right.  It  is  not  burden- 
some. It  is  simple  in  collection.  We  bring  nothing  into  the 
world  when  we  come  and  should  take  nothing  out.  Larger 
fortunes  should  pay  a  greater  percentage.  Indirect  heirs 
should  be  cut  off  entirely  except  by  will,  so  should  bequests 
to  religion. 

This  seems  to  be  a  proper  form  of  revenue  for  Federal 
purposes,  to  replace  in  some  measure  the  iniquitous  tariff. 
But  it  might  be  advisable  that  it  should  be  applied  to  specific 
purposes. 

The  most  appropriate  use  possible  is  for  old  age  pen- 
sions. 

Certain  forms  of  property  only  might  be  taxed  for  this 
purpose — inherited  bonds,  corporation  stocks,  mortgages 
and  all  inherited  evidence  of  debt  seem  advisable  for  national 
taxes.  Real  estate  and  personal  property  inherited  might 
be  left  to  be  taxed  locally. 

Old  age  pensions  are  of  the  plainest  and  most  positive 
necessities  of  civilization. 

Why  should  the  soldier  of  war  get  a  pension  and  the 
soldier  of  peace  get  none?  The  most  useful  citizens  often 
have  the  least  acquisitiveness.  What  is  more  pitiful  than 
a  white-haired  man  or  woman,  after  a  lifetime  in  useful 
work — perhaps  in  raising  a  family — helpless  and  without 
support?  He  may  have  earned  vast  fortunes  of  wealth  of 
which  all  got  a  benefit,  and  yet,  either  through  mistaken 
liberality  or  lack  of  good  management,  arrives  at  old  age 
penniless.  The  wants  of  the  old  are  not  many;  they  should 
be  supplied.  Not  as  a  gift,  but  as  something  due  them. 
This  is  done  in  New  Zealand.  This  means  of  restoring  to 
society  its  own  is  eminently  scientific.  No  other  remedy  can 
take  its  place.     As  intelligence  increases  it  will  be  demanded. 

How  little  it  would  cost  for  each  county  to  procure  a 
tract  of  rolling  farm  land  and  subdivide  it  into  lots  of  half 
an  acre  or  so  and  erect  on  each  a  small,  plain,  cozy  cottage 


206  RIGHT  AND  RICHES 

of  two  or  three  rooms.  Each  poor  old  person  in  the  county 
could  be  furnished  one  of  these  as  their  own  home  for  the 
balance  of  their  lives.  The  land  would,  with  their  own  light 
labor,  half  support  them.  The  county  could  furnish  such 
further  assistance  as  was  needed.  Meeting  places  and  clubs 
should  be  furnished  to  make  their  hours  more  pleasant.  The 
average  Poorhouse  is  one  of  the  saddest  failures  known.  A 
fraction  of  burdensome  inheritances  would  supply  the  ut- 
most needs  of  childhood  and  age. 


CHAPTER  V. 

Taxation  and  Compe:nsation. 

HAT  is  Government?  It  is  not  a  person,  society  or 
corporation.  In  a  monarchy  it  is  the  king  and 
royalty.  In  a  true  democracy  it  is  simply  the  agent 
of  society.  But  there  is  no  existing  example  of 
true  democracy.  Various  countries  with  Republican  form 
of  government  are  approaching  nearer  to  a  true  democracy 
than  ever  before  in  history.  But  it  matters  not  in  its  effects 
whether  the  will  of  the  people  is  thwarted  by  an  heredi- 
tary royalty,  or  by  some  other  power,  which  dictates  to  and 
controls  the  people's  agent. 

Wherever  the  people's  agent  is  controlled  by  another 
power  than  the  people,  the  funds  placed  at  its  disposal  by 
taxation  are  largely  used  for  the  benefit  of  this  controlling- 
force. 

In  a  monarchy  it  is  diverted  to  the  use  of  a  royal  fam- 
ily and  its  multitude  of  relations.  In  a  republic  it  may  be 
diverted  to  the  use  of  the  owners  of  privilege. 

A  truly  democratic  republic  is  a  corporation  in  which 
each  citizen  holds  one  share  of  stock,  no  more,  no  less.  We 
should  each  and  everyone  vote  that  share,  and  insist  on  a 
large  dividend. 

There  should  be  no  assessment  ever  needed  on  this  stock. 
Society  has  such  rich  resources,  which,  should  its  agents  hon- 
estly lease  or  otherwise  collect  an  equitable  revenue  from 
them,  would  pay  for  many  times  the  benefits  that  govern- 
ment now  affords  us. 

Government  is  society's  Trustee.  The  property  in  the 
hands  of  Society's  agent  is  intended  only  to  be  used  for  such 
purposes  as  benefit  all  people.    We  often  hear  the  expression 

207 


208  RIGHT  AND  RICHES 

"taxes  for  the  support  of  government."  This  expression 
betrays  an  ignorance  of  the  true  purpose  of  government. 
One  would  not  say  that  the  dues  he  paid  to  his  lodge,  his 
church,  or  the  premiums  he  paid  to  his  mutual  insurance  so- 
ciety, were  intended  by  him  for  the  support  of  its  agents. 
Another  expression  of  the  same  persons  is  "the  protection 
given  taxpayers  by  government." 

Protection  to  what  ?  Against  what  ?  Protection  against 
bandits  or  pirates?  Truly  government  does  give  this  pro- 
tection, but  it  takes  such  a  minor  part  of  its  revenues  that 
it  is  foolish  to  consider  such  protection  as  being  any  consid- 
erable part  of  the  purpose  of  taxation. 

If  it  is  meant  the  protection  of  certain  interests  in  their 
system  of  extortion,  we  may  consider  that  taxation  to  them 
is  indeed  compensated  by  "protection." 

But  what  compensation  should  the  taxpayer  get  under 
an  honest  system  of  government?  He  should  get  a  direct 
commercial  advantage  for  every  dollar  he  pays.  To  para- 
phrase the  old  sentimental,  though  reasonless.  Revolution- 
ary battle-cry,  we  want  "no  taxation  without  compensa- 
tion." "No  taxation  without  compensation"  implies  the 
correlative  proposition,  "compensation  to  society  for  all  con- 
cessions and  privileges."  This  compensation  which  is  due 
to  society  in  return  for  the  natural  and  social  opportunities 
conferred  upon  private  persons  and  concerns,  would  supply 
a  plenteous  fund  of  revenue.  The  Saturday  Evening  Post 
says : 

"The  assessed  value  of  land  alone,  exclusive  of  improve- 
ments, in  the  City  of  New  York  is  greater  than  the  assessed 
value  of  all  the  real  estate,  improvements  included,  in  the  State 
of  Pennsylvania,  and  nearly  twice  as  great  as  the  value  of  all 
the  real  estate,  improvements  included,  in  the  State  of  New 
York  outside  of  the  city.  The  assessed  valuation  of  land  for  six 
square  miles  of  ]\Ianhattan  in  the  neighborhood  of  Central  Park 
is  greater  than  the  assessed  value  of  all  the  real  estate  in  the 
State  of  Missouri. 


TAXATION  AND  COMPENSATION  209 

"So  says  the  president  of  the  New  York  City  tax  board  in 
his  latest  report;  and  we  earnestly  commend  the  statement  to 
the  consideration  of  all  those  persons  whether  official  or  lay, 
who  are  studying  the  troublesome  subject  of  taxation. 

"The  City  of  New  York  created  every  dollar  of  that  enor- 
mous value.  And,  while  the  city  is  creating  this  vast  wealth 
for  individuals,  it  is  anxiously  seeking  money  to  pay  its  running 
expenses.  Try  to  imagine  a  man  who  produces  a  million  dol- 
lars a  week  and  has  to  borrow  money  to  buy  flour  and  bacon. 

"Various  expedients  to  recover  for  the  people  who  actually 
make  it,  some  share  of  this  immense  increment  have  been  sug- 
gested, and  even  tentatively  practiced,  as  in  levying  a  graduated 
percentage  tax  upon  the  increase  in  value  between  each 
recorded  transfer.  In  nearly  every  American  city,  tax  experts 
toil  over  schemes — mostly  impracticable — to  uncover  tax-dodg- 
ing personal  property  or  get  a  few  thousand  more  out  of  dog 
licenses,  and  will  not  look  at  this  gold  mine  of  realty  in- 
crement." 

What  a  farce  are  most  of  the  present  means  of  taxation ! 
Even  the  most  common  theory  of  taxation,  if  applied  in  any 
business  but  that  of  government,  would  be  resisted  as  pure 
robbery. 

This  accepted  precept  is  that  each  shall  pay  taxes  accord- 
ing to  the  value  of  the  property  ozvned  by  him. 

Suppose  one  had  his  bill  at  the  hotel  rendered  on  this 
basis ;  suppose  the  grocer,  tailor,  street  car  line,  the  gas  com- 
pany, the  coal  merchant,  charged  on  this  basis.  How  ab- 
surd !     What  ridiculous  consequences  ! 

Why  should  one  pay  taxes  on  the  value  of  his  diamonds, 
stocks,  merchandise,  live  stock,  because  he  lives  within  the 
geographical  limits  of  a  city,  State  or  other  taxing  com- 
munity? Intelligent  taxation  is  a  debt  for  value  received. 
How  can  one  cancel  such  debt  to  one  community  and  incur 
a  like  one  to  another  community  by  moving  his  bed  across 
a  boundary  line? 

Many  laws  are  passed  by  State  legislatures  purporting 
to  encourage  the  growing  of  fine  stock.  Yet  whenever 
stock  of  great  value  is  brought  into  the  State,  the  owner 


210  RIGHT  AND  RICHES 

must  pa)'  a  tax  penalty.  A  recent  press  notice  gloated  over 
the  fact  that  a  fine  collection  of  art  had  been  caught  by  a 
new  form  of  assessment.  Millionaires,  and  people  of  even 
less  wealth,  are  driven  out  of  cities,  where  the  rate  is  high, 
to  villages  where  it  is  less,  by  such  robbery  laws. 

The  history  of  taxation  would  be  the  basis  for  the  great- 
est of  farce  comedies,  if  it  were  not  of  such  sad  conse- 
quences.    There  have  been  taxes  on  cats,  dogs,  birds. 

Most  street  railway  franchises  have  a  license  tax  on  cars, 
of  $25.00  or  so.  Do  strap-hangers  ever  consider  how  many 
cars  this  may  keep  out  of  use? 

Taxes  on  wheeled  vehicles  have  caused  great  districts 
to  depend  on  sleds  for  means  of  conveyance.  Taxes  on  salt 
have  caused  people  to  become  diseased  for  want  of  it.  Taxes 
on  windows  have  built  thousands  of  homes  with  solid  walls 
except  for  doors.  This  is  indeed  a  consistent  result  of 
ignorant  taxation-^to  wish  to  shut  out  all  light.  One  of 
the  most  extensive  as  well  as  pernicious  bases  of  taxation 
is  that  on  exchange.  Think  of  striking  at  the  very  roots  of 
business  with  taxation. 

The  "Iron  Duke"  paralyzed  the  trade  of  the  prosperous 
Netherlands  by  such  a  tax.  Customs  houses  are  monuments 
to  this  most  abominable  form  of  taxation.  Tariff  taxation 
hinders  trade,  robs  •  the  producers  of  one  country  and  the 
consumers  of  another.  It  is  so  uncertain  in  its  results  that 
it  breeds  public  extravagance,  even  while  it  is  producing 
panic  by  piling  a  great  surplus  in  the  treasury.  Big  bank- 
ers fatten  on  this  through  free  use  of  such  surplus.  There 
is  no  known  certain  means  of  reducing  or  increasing  the 
amount  of  revenue  under  a  tariff  tax.  Lowering  the  rate 
often  increases  the  revenue,  and  raising  it  often  lowers  it. 
No  one  can  approximately  predict  the  amount  of  revenue. 
A  tariff  tax,  like  most  unjust  taxation,  fosters  artificial  lines 
of  industry.  (Thomas  G.  Shearman,  in  his  Natural  Taxa- 
tion, has  very  logically  dissected  tax  systems.     His  work 


TAXATION  AND  COMPENSATION  211 

should  be  read  by  every  member  of  a  legislative  body  from 
United  States  Congress  to  district  school  board.) 

It  is  well  recognized  that  if  railroads  allow  some  patrons 
free  or  reduced  rates  they  must  overcharge  others.  If  this 
is  true  of  a  private  corporation,  how  much  more  so  must  it 
be  true  of  government.  If  government  gives  its  resources 
free  to  some,  it  is  compelled  to  rob  others. 

The  usual  manner  of  enforcing  payment  is  often  as  fool- 
ish as  the  basis  of  tax  assessment.  In  many  States  property 
is  sold  for  taxes,  but  the  buyer  is  given  no  title,  while  the 
poor  owner  is  deprived  of  his.  In  some  States  a  discount 
is  allowed  for  payment  previous  to  a  certain  day  and  a  pen- 
alty is  exacted  after  such  day.  But  in  most  States  there  is 
no  such  reasonable  provision.  Millions  of  dollars  are  forced 
from  the  people's  pockets  into  the  hands  of  treasurers,  to  be 
kept  by  the  bankers  who  back  them,   free  of  interest. 

John  F.  Smulski,  elected  treasurer  of  Illinois,  deserves 
great  praise  for  refusing  to  qualify  until  a  law  was  passed 
permitting  him  to  loan  out  the  State  funds  with  interest  pay- 
able to  the  State.  He  also  insisted  that  the  State  should  pay 
the  surety  company  bond  premiums  to  keep  the  treasurer 
free  from  bank  domination. 

But  why  should  Illinois  have  from  five  to  eight  million 
dollars  at  a  time  in  her  treasury?  Why  not  distribute  its 
collection  throughout  the  twelve  months  of  the  year? 

That  taxes  are  neither  philanthropy  nor  charity  is  tersely 
stated  in  the  following  editorial  from  the  Saturday  Evening 
Post  entitled  "The  Important  Taxpayer" : 

"Somebody  has  discovered,  in  a  flourishing  inland  city,  that 
the  school  board,  which  disburses  a  great  deal  of  public  money, 
has  no  member  who  owns  much  property  and  pays  taxes  to  a 
considerable  amount.  Opponents  of  the  administration,  there- 
fore, are  making  what  capital  they  can  out  of  the  ancient  and 
naive  theory  that  taxpayers  have  a  proprietary  interest  in  the 
government.  One  observes,  however,  that  they  are  not  suc- 
ceeding as  well  as  they  might  reasonably  have  expected  to  do 


312  RIGHT  AND  RICHES 

a  dozen  years  ago,  when  the  statement,  that  taxpayers  were 
opposed  to  a  certain  measure,  was  regarded  as  a  crushing 
argument,  and  "wasting  taxpayers'  money"  was  a  damning 
charge  against  any  administration. 

"Of  course,  no  administration  does  or  ever  did  waste  tax- 
payers' money — for  the  simple  reason  that,  the  moment  the 
taxes  are  paid,  the  money  ceases  to  be  taxpayers'  money  and 
becomes  the  government's  money.  What  the  government  does 
with  it  is  no  more  the  business  of  the  taxpayer  than  of  any 
other  citizen.  Small  taxpayers  have  the  modesty  to  acknowl- 
edge this  self-evident  truth.  But  if  a  man  pays  a  considerable 
amount  in  taxes  it  is  often  nearly  impossible  to  wean  him  from 
the  gross  and  palpable  fallacy  that  he  is  entitled  to  especial 
consideration  on  the  part  of  the  government." 

The  same  theory  is  held  in  many  churches  regarding 
large  contributors.  Such  contributors  give  sums  of  money 
"to  the  Lord"  and  then  count  themselves  controlling  stock- 
holders in  His  church. 

Continuing,  the  Post  says : 

"Any  one  who  thinks  that  taxes  are  a  voluntary  contribu- 
tion should  attend  a  session  of  the  board  of  assessors  for  his 
locality.  In  many  cities,  saloons  pay  more  taxes  than  any 
other  interest,  but  are  not  given  proportionate  representation 
on  school  boards  and  park  commissions. 

"We  wish  speakers  and  writers  on  political  subjects  would 
drop  the  bad  habit  of  talking  about  large  taxpayers  as  though 
they  were  entitled  to  higher  regard  than  other   citizens." 

The  owner  of  lots  should  pay  the  full  cost  of  paving  the 
street  in  front  of  them.  He  gets  compensation  in  increased 
value.  But  he  should  not  therefore  have  his  general  taxes 
increased.  This  is  like  the  story  of  the  landlord  raising  the 
rent  because  the  tenant  fixed  the  roof. 

License  taxes  are  a  crime.  The  fir.st  thing  tax  reformers 
should  strive  for  is,  that  pending  the  abolition  of  taxes  on 
production,  all  taxes  on  land  or  franchises  should  be  as- 
sessed separately  from  any  improvements,  and  the  taxes  at 
payment  be   receipted   separately.     This   would   bring   the 


TAXATION  AND  COMPENSATION  213 

matter  to  people's  understanding.  It  would  have  another 
excellent  effect.  It  would  promote  a  more  equal  assessment. 
Lot  10  of  a  block  assessed  without  improvements  might 
look  very  strange  assessed  for  double  that  of  9  or  11. 

It  is  often  more  easy  to  pay  the  taxes  in  a  community 
where  they  are  high  than  in  another  where  they  are  low. 
Taxes  are  an  investment  and  should  pay  higher  dividends 
than  any  other  investment  if  properly  assessed  and  expended. 
Government  investments  should  constantly  but  carefully  in- 
crease. They  can  often  be  made  very  profitable.  The 
profits  of  good  sewers,  parks,  schools,  clean  streets  and  such 
things  are  immense. 

The  object  of  government  is  happiness  of  the  people,  all 
the  people,  not  a  favored  few.  Each  child  should  have  the 
care  which  childhood  needs,  should  have  education,  enter- 
tainment and  music.  Each  adult  should  have  a  chance  to 
earn  a  comfortable  subsistence  with  some  degree  of  luxury. 

None  should  acquire  private  title  to  anything  more  than 
what  is  the  "natural  reward"  for  production.  All  else  be- 
longs to  public  and  is  an  ample  fund  of  taxes.  In  "The 
World  To-day,"  Sir  Henry  Campbell-Bannerman  says : 

"It  may  accurately  be  said  that  there  is  practically  but  one 
great  impediment  in  the  way  of  a  sweeping  improvement  which 
would  elevate  the  physical  and  moral  welfare  of  the  people. 
This  is  the  interest,  and  the  overdue  regard  to  the  interest,  of 
the  landowner,  and  the  political  and  social  influence  that  he  and 
his  class  can  exercise. 

"Let  the  value  of  land  be  assessed  independently  of  the 
buildings  upon  it.  and  upon  such  valuation  let  contributions  be 
made  to  those  public  services  which  create  the  value.  What  is 
our  rating  system?  It  is  a  tax  upon  industry  and  labor,  upon 
enterprise,  upon  improvements;  it  is  a  tax  which  is  the  direct 
cause  of  much  of  the  suffering  and  overcrowding  in  the  towns." 

The  wretchedness  of  the  city  slum  is  partly  the  result 
of  the  present  system  of  tax  robbery.  The  slum  tenant  is 
taxed  on  nearly  all  he  eats  and  wears  and  then  pays  the  high 


214  RIGHT  AND  RICHES 

price  which  natural  hmitations  of  space  near  the  center  de- 
mands. But  he  does  not  pay  this  to  society,  whose  it  rightly 
is,  but  to  his  landlord.  Each  addition  to  population  makes 
the  value  of  land  greater.  What  makes  this  value  the  fol- 
lowing paragraph  from  the  St.  Louis  Post-Dispatch,  en- 
titled "The  Money  Value  of  Men,"  indicates : 

"With  immigration  from  Europe  now  on  the  million-a- 
year  basis,  Prescott  F.  Hall  has  published  a  volume  intend- 
ed to  show  its  advantages  and  disadvantages  to  the  country. 
In  dealing  with  its  advantages,  he  estimates  each  immigrant 
as  worth  at  least  a  thousand  dollars,  so  that  a  single  year's 
arrivals  from  Europe  are  supposed  to  add  a  thousand  mil- 
lion dollars  to  the  wealth  of  the  country.  One  statement 
offered  in  support  of  this  view  is  that  it  'costs  a  thousand 
dollars  to  rear  a  child  to  the  age  of  14.'  While  this  does 
not  seem  to  be  necessarily  or  even  generally  true,  it  is  prob- 
able that  the  average  'value'  of  any  man  who  can  consume 
enough  to  live  on  and  pay  for  it  by  his  own  work,  is  placed 
low  at  a  thousand  dollars." 

To  whom  are  these  immigrants  worth  $1,000  each?  To 
owners  of  concessions,  of  course.  The  immigrants  go  to 
make  the  slums  more  crowded,  hence  to  make  rents  and 
franchises  more  valuable.  But  I  doubt  if  the  city  slum 
is  more  cheerless  than  doleful  poverty  in  the  country 
on  land  near  or  beyond  "the  marginal  limit"  of  cultivation 
(that  is  so  poor  or  far  from  civilization  no  one  wants  it),  or 
on  better  farms  giving  all  the  cream  of  their  crops  for  rent. 

People  do  not  leave  farms  without  cause.  Nor  do  they 
go  to  the  big  city  without  some  shadow  of  reason.  Edward 
Everett  Hale  says : 

"It  is  easy  to  make  faces  as  we  meet  the  young  country- 
man with  his  wife  when  they  come  from  Podunk  to  New  York 
and  to  ask  them  what  they  have  come  for;  but  it  is  foolish  to 
suppose  that  the  congestion  of  cities  results  from  their  in- 
experience or  ignorance.  There  are  some  important  people  who 
are  working  with  them   in  this  matter  of  crowding  the  towns. 


TAXATION  AND  COMPENSATION  215 

First  of  all,  there  is  the  large  real  estate  interests  in  every  city. 
It  needs  no  organization;  it  is  an  organization  already.  The 
man  whose  grandmother  owned  an  orchard  of  old  apple  trees 
in  the  heart  of  Boston  or  New  York  is  glad  that  his  grandmother 
owned  that  orchard.  He  is  glad  that  he  owns  the  square  feet 
or  square  inches  of  that  orchard  to-day.  He  knows  as  well  as 
I  know  that  those  square  inches  are  worth  a  great  deal  more 
in  money  than  they  were  worth  a  hundred  years  ago.  Now 
that  man  does  not  mean  to  diminish  the  current  of  population 
which  falls  into  Boston  or  New  York.  He  means  to  keep  up  the 
price  of  real  estate  in  those  cities  if  he  can.  And  when  you 
address  him  a  civil  note,  asking  him  if  he  will  not  attend  a 
meeting  of  gentlemen  who  wish  to  promote  emigration  to 
Idaho,  it  is  almost  certain  that  that  man  will  have  another  en- 
gagement. 

"Again,  it  is  to  be  observed  that  great  cities  have  of  neces- 
sity their  own  spokesmen — shall  one  say  their  own  drummers? — 
at  work  for  them  even  unconsciously.  Every  issue  of  any  news- 
paper of  the  week-day  or  a  Sunday  has  its  announcements  of 
the  attractions  of  a  great  city." 

This  real  estate  interest  crowds  every  industry  possible 
into  the  city  and  close  to  the  center. 

Why  do  the  newspapers  drum  for  this  interest,  and  in 
some  cases,  particularly  in  the  newer  cities,  fill  the  people 
with  shameful  lies?  Because  this  interest  does  lots  of  ad- 
vertising. Why  the  need  to  go  thirty  stories  above  ground 
in  New  York  and  six  under,  when  in  an  afternoon's  auto 
ride  one  can  go  to  the  haunts  of  wild  bear  and  turkeys  ? 

This  land  interest  knowingly  and  intentionally  takes  the 
people's  earnings.  Unintentionally  they  lure  them  into 
places  of  the  greatest  hardship. 

The  time  is  ripe  for  a  society  to  expose  fake  booms  and 
to  discourage  the  congestion  in  city  centers.  This  may  be 
done  by  taxing  these  congested  centers ;  by  regulating  the 
running  of  cars  so  they  will  not  all  reach  one  certain  street 
crossing,  but  a  number  some  distance  apart;  by  creating  a 
central  zone  where  factories  may  not  be  operated,  or  if  oper- 
ated, put  a  heavy  license  tax  on  them.    Limit  the  height  of 

14— 


216  RIGHT  AND  RICHES 

buildings.  It  does  no  good  to  improve  transportation  if  the 
number  of  people  going  to  one  center  correspondingly  in- 
creases.   Scatter  employment  and  you  will  scatter  employes. 

Concession  taxation,  that  is  limiting  current  levies  of 
taxes  to  those  values  which  are  naturally  the  property  of  the 
community,  is  but  reclaiming  what  is  the  community's  own. 
It  will  take  the  burden  from  wealth,  from  capital,  from  in- 
dustry. It  will  restore  to  the  providers  of  capital  what  is 
now  being  taken  wrongly  by  government.  It  will  discour- 
age holding  of  concessions  for  the  purpose  of  prechiding 
their  use,  hence  will  partially  restore  to  producers  their 
Natural  Reward,  to  capital  its  rightful  increase,  and  to  labor 
its  just  wage. 

Such  taxation  would  be  but  the  compensation,  or 
recompense,  due  to  society  from  the  payer.  Society  has  no 
more  just  right  than  any  other  corporation  or  organization 
to  forcibly  take  from  anyone,  without  having  some  rational 
basis  of  claim ;  without  having  previously  contributed  to 
such  individual  an  equivalent. 

The  simple  fact  of  the  extent  of  one's  riches  is  no  indica- 
tion whatever  of  the  extent  of  society's  dues  from  him. 

Australasia  is  far  in  advance  of  America  in  its  manner 
of  arriving  at  just  assessment  values.  One  of  their  simple 
provisions  is  to  make  the  land  liable  to  public  purchase  at 
a  certain  per  cent,  above  its  assessment  for  taxes. 


CHAPTER  VI. 

QuANTiTivE  Title  Restriction. 

RESIDENT    ROOSEVELT,    among    others,    has 
pointed  out  the  dangers  to  society  from  unlimited 
holdings  of  property  by  an  individual  or  corpora- 
tion.    What  is  the  reasonable  quantity  which  one 
may  hold?     This  is  hard  to  establish,  but  scarcely  more  so 
tlian  to  assess  the  just  value  of  property  for  taxation. 

Let  us  start  out  gradually  as  Australia  has  done.  Break 
up  the  most  extensive  estates.  What  has  been  the  curse  of 
Ireland,  or  California?  Each  are  blessed  with  a  climate  fit 
for  Paradise,  and  soil  of  surprising  wealth ;  especially  Cali- 
fornia, such  diversity  in  all  things  does  she  possess.  The 
highest  mountain  in  the  States,  in  the  same  county  with 
land  600  feet  below  sea-level,  vast  stores  of  valuable  min- 
erals, some  almost  unknown  elsewhere;  trees  compared  with 
which  all  others  are  shrubs.  But  as  Ireland  is  cursed  by 
English  landlords,  California  is  cursed  by  Spanish  land 
grants,  now  owned  by  all  nationalities. 

One  old  Spaniard  was  recently  offered  $750,000  for  one 
grant  of  a  thousand  acres  which  perhaps  does  not  now,  for 
want  of  care,  produce  a  hundred  dollars  worth  per  year. 
Yet  he  plays  dog  in  the  manger  and  asks  a  million  which,  if 
offered,  he  should  perhaps  refuse.  There  are  hundreds  of 
tracts  the  same;  some  tens  of  thousands  of  acres  in  extent. 
Vast  tracts  have  been  acquired  in  many  States  by  lumber 
companies. 

"The  chairman  of  the  board  of  directors  of  the  United  States 
Steel  Corporation,  says  the  Review  of  Reviews,  is  virtually  the 
ruler  of  an  empire  owning  more  land  than  Massachusetts,  New 
Hampshire,  and  Vermont  combined;  supporting  more  people 
than    inhabit   Nebraska;    employing    more    men   than    fought    at 

217 


218  RIGHT  AND  RICHES 

Gettysburg;  sailing  a  larger  navy  than  that  of  Italy;  making 
more  steel  than  Germany;  gathering  in  a  larger  revenue  than  the 
United  States,  and  representing  more  capital  than  all  the  banks 
in  the  city  of  Nev^r  York. 

Has  a  man  a  right  to  ozmi  all  he  can  get?  The  question 
of  unreasonable  fortunes  is  a  vital  one  to  government.  They 
give  extraordinary  power.  Power  is  government.  Conflict 
arises  between  the  private  power  and  the  constituted  author- 
ity which  results  in  the  triumph  of  the  private  power  if  not 
patriotically  checked. 

Frederick  Upham  x^dams  in  The  Cosmopolitan,  says : 

"A  marked  tendency  has  already  developed  on  the  part  of 
our  "leisure  class,"  resulting  in  the  purchase  of  vast  tracts  of 
land  which  are  withdrawn  from  settlement,  agriculture  or 
lumbering,  and  which  are  set  aside  for  game  preserves.  Thou- 
sands of  square  miles  of  the  Adirondacks  are  already  thus  re- 
served. This  segregation  of  valuable  tracts  of  land  by  the 
nobility  and  aristocracy  is  one  of  the  curses  which  afflict  Ger- 
many, Austria,  Russia  and  even  Great  Britain.  The  idle  heir  of 
a  billionaire  could,  if  he  chose,  purchase  such  States  as  Idaho, 
Nevada,  Arizona,  or  New  Mexico,  and  convert  one  or  all  of 
them  into  private  pleasure  grounds. 

"There  would  be  nothing  inherently  vicious  in  such  a  pro- 
ceeding. He  could  "get  rid  of  his  money"  by  hiring  an  army 
of  men  to  prepare  golf  courses  a  thousand  miles  in  extent;  he 
could  boulevard  the  Rocky  Mountains  for  the  exclusive  use  of 
his  automobiles  and  for  those  of  his  friends,  and  he  could  do 
with  it  as  one  does  with  any  other  piece  of  private  property. 

"The  total  assessed  valuation  of  the  States  of  Idaho,  Ari- 
zona, Nevada  and  New  Mexico,  according  to  the  latest  statis- 
tics available,  is  $184,379,167,  and  the  beautiful  State  of  Idaho 
is  listed  at  a  trifle  more  than  fifty  millions.  Such  an  invest- 
ment would  not  bother  the  sportive  heir  of  a  billionaire.  For 
less  than  one-quarter  of  his  patrimony  he  could  purchase,  and 
have  the  sole  use  of,  one-seventh  of  the  area  of  the  United 
States,  subject  only  to  the  exactions  of  the  federal  and  common 
law. 

Should  he  be  permitted  to  do  this?  It  will  not  avail  the 
individualist  to  plead  that  no  person  will  be  so  foolish  as  to  at- 
tempt such  a  step.  If  a  man  can  purchase  a  range  of  mountains 


QUANTITIVE  TITLE  RESTRICTION  219 

and  use  them  to  look  at  or  hunt  in,  who  shall  prevent  him  from 
adding  the  adjoining  counties  to  his  playground?  The  in- 
dividualist must  answer  in  the  affirmative.  Can  he  hold  a 
quarter  of  a  State,  half  a  State,  all  of  a  State  or  several  States? 
The  individualist  must  affirm  that  there  can  be  no  limit  set  to 
his  holdings.  If  he  makes  any  other  answer  the  whole  fab- 
ric of  his  theory  falls  to  the  ground. 

"The  moment  a  man  declares  his  belief  that  the  govern- 
ment should  have  the  power  to  limit  the  accumulation  of  wealth, 
or  to  interfere  with  its  investment  or  expenditure,  that  moment 
he  has  arrayed  himself  against  the  "freedom  of  contract,"  and 
has  joined  the  ranks  of  those  who  demand  radical  changes  in 
institutions  which  have  existed  for  centuries.  If  an  individual 
has  the  right  to  own  or  control  the  great  transportation  lines 
which  connect  the  Atlantic  with  the  Pacific,  why  do  you  chal- 
lenge his  right  to  purchase  the  thinly  populated  empire  con- 
tained in  such  States  as  Idaho,  Arizona,  Nevada  and  New 
Mexico?  As  an  individualist  you  assert  that  the  national 
government  has  no  right  to  interfere  with  the  private  manage- 
ment of  two  hundred  thousand  miles  of  railway;  what  concern 
is  it  of  yours  what  our  young  billionaire  does  with  four  hun- 
dred and  twenty  thousand  square  miles  of  territory  admirably 
adapted  for  a  hunting  and  fishing  preserve?  How  are  you  to 
prevent  him  from  buying  it;  how  are  you  to  regulate  his  use  of 
it;  how  are  you  to  take  it  from  him?" 

The  most  obvious  remedies  for  too  great  an  accumulation 
of  wealth  in  one  person  are  the  application  of  the  State's 
right  of  Eminent  Domain  and  a  graduated  tax  after  so  much 
is  acquired.  It  should  at  least  seem  no  hardship  to  expect 
the  great  magnates  of  property  to  pay  a  higher  percentage 
than  others.  We  might  compensate  for  such  increase  of  tax 
rate  on  the  very  rich  by  remitting  all  tax  to  the  very  poor 
owners  of  very  humble  homes.  We  might  begin  by  limit- 
ing the  quantity  of  land  any  person  might  own  as  is  pro- 
posed in  Oklahoma.  Alien  ownership  of  land  in  Oklahoma 
is  prohibited,  excessive  land  ownership  by  Oklahomans  dis- 
couraged, and  charters  to  land  companies  are  to  be  denied 
under  the  terms  of  a  proposed  constitutional  proposition. 
After  denying  to  non-residents  the  right  to  own  land  in 


220  RIGHT  AND  RICHES 

Oklahoma,  the  proposition  requires  the  Legislature  to  pro- 
vide that  those  who  may  inherit  land  in  Oklahoma  shall  re- 
linquish title  within  a  reasonable  time.  Corporations  desir- 
ing to  buy,  sell  or  speculate  in  lands,  or  act  as  the  agents  for 
other  corporations  or  persons,  shall  be  denied  a  charter  un- 
der the  terms  of  the  provision. 

Extensive  ownership  of  lands  by  Americans  is  discour- 
aged by  sections  of  the  proposition,  which  provides  for  the 
levying  of  additional  taxes  on  persons  having  land  above  a 
certain  amount.  Those  persons  having  more  than  2,000 
acres  will  be  required  to  pay  the  following  additional  tax 
in  excess :  Above  2,000  acres,  2  per  cent. ;  above  3,000  acres, 
5  per  cent. ;  above  10,000  acres,  25  per  cent. ;  above  20,000 
acres,  50  per  cent.,  and  above  30,000  acres,  100  per  cent. 

Another  section  of  the  proposition  provides  that  banks 
and  loan  companies  acquiring  land  by  foreclosure  of  mort- 
gages shall  be  exempt  from  this  excess  taxation  for  a  period 
not  to  exceed  five  years  after  the  foreclosure.  The  legisla- 
ture is  authorized  to  provide  for  a  graduated  tax  upon  per- 
sons leasing  more  than  2,000  acres  of  land. 

It  is  proposed  to  have  Kansas  compel  the  owners  of  land 
in  excess  of  the  amount  necessary  for  a  livelihood  to  pay 
an  additional  tax  or  license.  Edwin  Taylor,  who  owns 
more  than  1,000  acres  of  the  richest  land  in  Kansas,  is  the 
father  of  the  proposed  legislation.  Mr.  Taylor  says  he  has 
more  land  than  he  is  entitled  to ;  that  he  is  a  land  monopo- 
list, and  that  he  is  willing  to  divide  his  property  with  smaller 
holders  or  pay  an  additional  tax.  Mr.  Taylor  is  one  of  the 
advanced  thinkers  of  the  State,  besides  being  one  of  the 
State's  wealthiest  men. 

In  a  speech  on  the  subject  before  the  meeting  of  the  State 
Horticultural  Society,  he  said : 

"There  may  be  a  discrepancy  between  my  practice  and 
my  precept  concerning  land.  I  say  in  explanation  that  I 
have  played  the  land  game  according  to  the  rules  in  force. 


QUANTITIVE  TITLE  RESTRICTION         221 

but  I  believe  these  rules  to  be  unjust  and  unwise.  For  my 
part,  I  believe  in  one  wife  and  one  farm  for  one  man,  and  I 
would  have  the  laws  so  changed  that  Mormonism  in  either 
would  be  impossible. 

"Monopoly  is  one  of  the  words  with  which  the  American 
public  is  impatient,  and  the  meanest  monopoly  of  all  is  tlie 
monopoly  of  land,  outside  of  the  requirements  of  a  home  and 
a  livelihood.  It  is  a  monopoly  that  will  not  always  last.  We 
can  choose  between  its  gradual  extinction  and  its  going  out 
in  strife  and  distress.  If  you  are  disposed  to  laugh  at  my 
dismal  prophecy,  bear  in  mind  that  both  the  North  and  the 
South  either  laughed  or  reviled  at  the  earlier  abolitionists. 
I  draw  no  parallel  betwen  the  situations ;  I  merely  say  that 
a  wrong  thing  is  not  a  safe  thing,  and  that  land  monopoly 
beyond  the  reasonable  limits  of  a  homestead  or  the  basis  of 
a  livelihood,  whether  measured  by  the  golden  rule  or  the 
good  of  the  State,  is  wrong." 

Land  is  the  most  important  but  not  the  only  monopoly. 
Patents,  copyrights,  and  some  other  forms  of  property  might 
well  be  restricted. 

The  power  given  by  copyright  or  patent  need  not  be 
unlimited.  It  need  not  require  a  very  intricate  law  to  com- 
pel the  holder  to  produce  his  works  at  reasonable  prices. 
Their  property  in  such  things  might  be  limited  to  a  certain 
percentage  on  their  selling  price  as  customs  are  collected  ad 
valorem.  Anyone  might  then  produce  such  things  by  pay- 
ing this  royalty.  But  until  the  grosser  evils  of  land  laws  and 
franchises  are  remedied  we  need  not  worry  with  copyright 
and  patent  laws. 

There  is  no  reason  why  unwieldy  estates  should  not  be 
broken  up  and  recovered  to  society  to  be  equitably  diffused 
among  its  members,  and  the  most  rational  w^ay  to  begin  is 
with  graduated  taxation;    equally  as  effective,  however,  is 


223  RIGHT  AND  RICHES 

the  assertion  of  the   State's  right  of  Eminent   Domain  as 
Australasian  countries  have  done. 

^         ^         ^  ^ 

The  foregoing  means  of  reclamation  are  consistent  with 
the  basic  scientific  principles  of  right.  They  admit  of  be- 
ing practically  put  into  effect,  therefore  every  lover  of  hu- 
manity should  inform  himself  about  them  and  work  for  their 
adoption. 

I  appeal  to  you,  communistic  socialists,  to  be  reasonable, 
for  you  cannot  have  a  tree  before  you  have  a  bush.  If  ever 
you  attain  your  ideal  it  must  be  brought  about  gradually. 

I  appeal  to  you  individualists,  you  who  believe  in  Abso- 
lutism in  title,  I  warn  you  against  the  rising  discontent.  If 
you  do  not  consent  to  justice  by  means  legal  and  orderly, 
take  care  lest  this  discontent,  driven  to  desperation,  break 
forth  in  anarchy.  For  men  more  easily  learn  the  injustice 
from  which  they  suffer  than  they  do  the  remedy  therefor. 


PART    SIX. 


Finance. 

Chapter    I.  Valuk-Poise. 

II.  Money. 

III.  Credit. 

"        IV.  Banks  and  Panics. 

"         V.    The  Importance  oe  Industrial  Corpora- 
tions. 


CHAPTER  I. 

VaIvUE-Poiss. 

N  the  chapter  on  "Value"  the  distinction  between 
"Exchange-Value"  and  "Utility"  and  "Lack- 
Value"  are  set  out.  In  considering  exchange- 
value,  market,  or  money-prices,  we  must  take  care 
not  to  try  to  measure  it  by  human  endurance,  for  it  is  this 
that  makes  so  much  jumble  of  the  subject. 

Is  it  not  obvious  that  as  the  sum  of  wealth,  the  volume 
of  commodities  and  conveniences  increase,  that  the  endur- 
ance, toil,  suffering,  or  labor-cost,  constantly  grows  less 
and  less? 

As  hours  of  labor  are  shortened  and  conditions  of  labor 
made  more  tolerable,  the  output  per  worker  increases  in 
proportion.  This  is  especially  so  when  we  take  the  sum  of 
output  to  humanity  as  a  whole,  and  not  simply  the  returns 
to  laborers ;  for  the  number  who  have  leisure  is  rapidly  in- 
creasing. 

Exchange-value  is  purely  a  comparison  of  market  prices ; 
not  a  comparison  of  either  the  utility,  the  cost  in  labor  or 
the  privation  it  would  cause  for  one  to  be  compelled  to  do 
without  the  various  things. 

This  exchange  value  of  things  is  subject  to  very  simple 
laws,  loosely  expressed  as  the  "laws  of  supply  and  de- 
mand."    More  exactly  stated,  these  laws  are  as  follows: 

Such  supply  of  things  consists  only  of  the  available  sup- 
ply— "what  is  on  the  market,"  "for  sale"  in  a  competitive 
way.  A  suppressed  store  or  deposit  of  natural  or  made 
wealth  is  not  part  of  the  supply.  This  refers  more,  how- 
ever, to  unproduced  wealth,  as  produced  wealth  is  seldom 
suppressed  in  large  quantities. 

225 


226  RIGHT  AND  RICHES 

Stocks  of  wheat,  cotton,  etc.,  stored  in  warehouses  to 
"bull"  the  market,  are  likely  to  affect  the  market  the  same 
as  though  offered  for  sale,  where  there  is  fear  that  they  may 
be  suddenly  offered.  But  unmined  ore,  unplowed  fields,  etc., 
do  not  compete. 

Only  that  demand  affects  the  market  which  is  backed  by 
purchasing  power;  which  is  seeking  exchange.  Suppose 
you  were  located  on  an  isolated  island  and  had  a  thousand 
tons  of  sugar.  What  would  be  its  value  to  you  ?  Obviously 
what  the  inhabitants  would  and  could  give  you  in  exchange 
for  it,  which  might  be  limited  to  a  few  very  crude  articles 
of  food,  furs,  etc.  But  could  you  teach  these  natives  how 
to  fabricate  the  innumerable  commodities  of  civilization, 
you  would  thereby  increase  their  means  of  buying  your 
sugar  and  in  that  degree  increase  its  value.  At  the  same 
time  you  would  likewise  increase  the  value  of  their  own 
original  staple  products  by  enabling  the  natives  to  buy  them 
with  such  newly  evolved  wealth.  The  starving  peasant 
with  nothing  to  offer  for  bread  does  not  constitute  demand 
for  bread. 

Demand  is  only  made  effective  by  having  other  forms  of 
wealth  with  which  to  buy.  Desire  for  things  in  general  is 
unlimited.  Hence,  the  demand  for  those  things  which  satisfy 
a  certain  desire,  is  dependent  on  the  total  supply  of  all  other 
things  being  offered  for  such  satisfaction.  But  desire  is 
relative  as  to  various  commodities. 

With  unlimited  quantities  of  free  supplies,  there  would 
be  only  a  minute  quantity  of  some  things  used,  while  im- 
mense quantities  of  others  would  be  taken.  Hundreds  of 
times  as  much  flour  would  be  used  as  pepper ;  many  times 
as  much  cotton  as  silk.  Such  we  may  term  the  Natural  De- 
mand. In  proportion  as  people  are  able  to  supply  this  nat- 
ural demand  there  is  Effective  Demand.  Natural  Demand 
may  increase  or  decrease  with  change  of  conditions  of  life 
and  industry. 


VALUE-POISE  227 

The  value  of  the  sum  total  of  all  wealth  may  be  repre- 
sented by  a  circle  which  always  has  360  degrees,  no  more,  no 
less,  though  the  volume  of  wealth  multiply.  The  com- 
modity or  group  of  commodities  which  satisfies  a  certain 
desire,  as  for  food,  fuel,  or  money,  comprises  a  segment  of 
so  many  degrees,  minutes  or  seconds  of  this  circle  of  supply. 

Natural  Demand  likewise  is  like  a  circle,  the  various 
needs  constituting  segments  of  so  many  degrees.  We  might 
estimate  the  Natural  Demand  for  food  at  present  as  45°  or 
one-eighth  of  the  total  circle  of  demand.  It  was  formerly 
much  more. 

The  balance  or  poise  of  value  resulting  from  supply  and 
demand  may  be  illustrated  by  a  compound  scale  as  shown 
on  page  239.  The  upper  arm  is  scaled  from  0  to  100.  On 
this  arm  moves  the  weight  C  which  stands  for  the  given 
commodity  under  the  consideration  as,  for  example,  steel  or 
window  glass,  or  cement.  The  lower  arm  has  a  hinged 
bearing  at  one  end,  E.  The  other  end  is  suspended  from  the 
end  of  the  upper  arm.  Upon  this  lower  arm  moves  the 
weight  B  which  stands  for  the  total  ivealth  of  the  com- 
munity. Now,  obviously,  if  we  move  the  weight  B  along 
the  arm  towards  F  we  will  have  to  move  the  weight  C  up 
towards  100  if  the  volumes  of  the  weights  remain  un- 
changed. 

Now,  as  we  are  illustrating  value  and  not  gravitation 
the  figures  on  the  upper  scale  stand  for  value  and  where 
the  weight  C  is  supported  indicates  the  value  of  the  com- 
modity  being   considered. 

That  is,  if  the  volume  of  total  ivealth  increase  one- 
seventh  it  would  tend  to  move  up  the  value  of  steel  (for 
instance),  from  70  to  80,  or  if  the  total  volume  of  zvealth 
decrease  it  will  tend  to  move  steel  down  perhaps  to  fiO. 

But  the  demand  for  steel  may  increase  from  causes 
other  than  the  general  increase  of  total  wealth,  it  may  be 


228  RIGHT  AND  RICHES 

from  a  campaign  of  advertising  and  education  of  the  public 
in  new  uses  for  steel. 

Now  this  increased  incentive  to  use  steel  obviously  will 
cause  a  greater  pressure  of  total  wealth,  B,  upon  the  supply 
of  steel,  C. 

Now,  if  the  special  demand  for  steel  cause  its  value  to 
move  up  from  35  to  70  we  shall  have  to  move  the  weight 
B  correspondingly  to  balance  it  and  this  will  indicate  a 
value  decrease  in  general  wealth  only  as  measured  in  steel. 

Now  these  relations  are  as  true  between  any  other  com- 
modity and  the  total  wealth  as  they  are  of  steel.  The  value 
of  money  is  as  truly  dependent  on  its  ratio  to  other  wealth, 
and  any  special  demand  for  it,  caused  by  fear  and  the 
withdrawl  of  credit,  will  surely  lower  the  money-value  of 
the  total  of  all  other  zvealth. 

For  the  increased  demand   for  money  will  cause  people 
to  offer  a  larger  volume  for  a  dollar. 

Likewise  an  increase  of  the  money  volume  C  even 
though  maintaining  its  nominal  value  at  100,  lowers  its 
real  value  and  increases  the  value  of  general  wealth  B  so 
that  it  moves  up  on  the  scale  on  the  lower  arm.  Decrease 
of  money  volume  while  not  changing  its  nominal  value  en- 
hances its  real  value  and  lowers  all  other  values  as  measured 
in  money. 

But  such  lowering  of  the  money-value  of  things  makes 
them  very  much  harder  for  the  average  person  to  procure. 


VALUE-POISE 


229 


230  RIGHT  AND  RICHES 

It  is  impossible  for  the  total  of  values  to  increase  or  de- 
crease. The  value  of  concessions  often  increases,  occupy- 
ing a  larger  segment  of  the  circle  with  a  corresponding  de- 
crease in  the  value  of  true  output,  wealth,  or  vice  versa. 
But  when  both  concessions  and  true  wealth  increase  in 
price,  we  may  know  that  money  has  decreased  in  value. 
That  is,  that  the  volume  of  money  C  is  greater,  and  conse- 
quently its  units  have  less  value,  and  naturally  it  takes 
more  dollars  to  balance  other  wealth.  That  has  been  the 
case  the  past  few  years,  when  lands,  franchises,  etc.,  as  well 
as  food,  building  material  and  all  wealth  have  gone  up  in 
money-measured  price.  The  value  of  all  things  cannot 
change.  It  would  increase  the  circle  to  over  360  degrees — an 
impossibility.  The  relative  segments  only  can  change.  As 
prices  are  counted  in  dollars,  an  increase  in  their  number 
and  a  lessening  of  the  value  of  dollars  makes  an  increase  of 
prices — an  apparent  increase  of  wealth. 

But  there  may  be  an  artificial  temporary  demand  cre- 
ated by  the  over-selling  of  such  commodity  on  contract — 
selling  the  market  "short,"  as  it  is  called  "on  'change." 
Commodities  such  as  wheat  or  the  shares  of  a  corporation 
are  often  sold  on  margin  for  future  delivery,  greatly  in  ex- 
cess of  the  actual  supply,  the  seller  depending  on  buying 
below  the  contracted  price  to  fill  the  contract.  If  it  be- 
comes known  that  there  is  an  excess  of  such  selling,  the 
"shorts  are  squeezed ;"  that  is,  those  who  hold  the  actual 
commodity  or  contracts  for  it,  raise  the  price  and  make  the 
shorts  pay.  Then,  after  the  date  of  settlement  of  such  con- 
tracts, the  price  is  likely  to  slump. 

Just  in  the  same  way  excessive  debt — contracting  to  de- 
liver money — is  in  fact  "selling  the  money-market  short." 
After  the  panic  is  over  the  money  market  slumps  and  there 
is  for  a  time  demand  for  but  part  of  the  original  volume  of 
money. 


VALUE-POISE  231 

So  we  see  that  neither  demand  nor  supply  has  any 
dependable  fixity.  Demand  depends  on  the  whims  and 
fancies  of  fickle  mortals.  Supply,  which  is  on  the  market 
and  active,  is  likewise  dependent  on  holder's  fickle  notions 
and  fears  of  how  little  or  how  much  demand  will  pay. 
Hence  we  see  that  there  can  be  no  scientific  determination  of 
value  established ;  for  it  is  impossible  to  found  anything 
definite  upon  fear  and  selfishness,  and  such  is  the  basis  of 
exchange  value.  For  selfishness  holds  out  for  excessive 
demands  until  fear  impels  the  taking  of  a  fraction  of  reason- 
able prices. 


15— 


CHAPTER  II. 

Currency  and  Money. 

"An  article  is  determined  to  be  money  hy  reason  of 
the  performance  hy  it  of  certain  functions  without  regard^ 
to  its  form  or  substance." — Appleton's  Encyclopedia. 

HAT  is  money? 

Not  a  species  of  things  of  a  certain  form, 
weight,  color  or  substance ;  not  a  class  of  things 
constituted  according  to  certain  prescribed  rules. 

Money  is  rather  an  idea,  or  thought,  objectified  in  in- 
numerable forms  and  substances.  What  is  a  noun?  Not 
a  tree  or  a  man  or  a  house.  No,  a  noun  is  an  idea.  "Tree," 
"man,"  or  "house"  may,  when  expressing  a  different  kind 
of  an  idea,  be  a  verb.  What  is  a  preposition?  A  word 
being  used  to  show  a  certain  relation  between  two  ideas. 
Now  money  is  that  idea,  thought  or  conception,  however 
expressed,  which  perforn>6  a  certain  function  or  functions. 

The  identification  of  many  things  must  be  by  their  func- 
tions. Wliat  is  a  ferry?  Not  essentially  a  large  boat  or  a 
small  one,  a  long  or  a  short  one,  a  steam,  man-power,  gaso- 
line or  sail  boat.  But  it  is  a  boat  which  crosses  a  stretch  of 
water  at  stated  intervals  for  the  transfer  of  freight  or  pas- 
sengers. While  it  is  engaged  in  performing  this  function 
of  transfer  it  is  a  ferry.  Now  what  is  the  function  of 
money?  It  has  two,  one  is  to  be  currency,  the  other  to  pay 
debts.     We  wnll  notice  first  that  as  currency. 

Whatever  is  accepted  as  a  medium  of  exchange  is 
currency. 

There  are  three  distinct  relations  in  which  owners  view 
property.  First,  that  of  selleF.  His  relation  is  such  that  he 
must  take  th'e  pains  to  find  a  buyer  whom  it  suits.    This  is 

233 


CURRENCY  AND  MONEY  233 

true  just  the  same  whether  he  be  producer  or  distributor. 
The  last  relation  is  that  of  buyer.  The  buyer  has  been  at 
the  pains  to  find  property  to  suit.  Property  is  of  more 
utility  in  his  hands.  This  is  true  whether  he  be  the  final 
user,  or  in  turn  is  to  become  a  seller.  The  medium  rela- 
tion is  that  of  currency.  The  possessor  of  currency  stands 
midway  between  buyer  and  seller. 

To  illustrate :  A  seller  has  shoes  to  sell.  Their  price  is 
$3.50,  but  to  get  it  he  must  be  to  the  pains  of  informing 
buyers  that  he  has  them,  and  must  by  selecting,  fitting,  etc., 
suit  the  buyer.  He  who  has  bought  new  shoes  has  been  to 
the  trouble  to  visit  a  store  to  select  the  appropriate  style, 
etc.,  and  to  get  fitted.  He  tells  you  his  shoes  are  worth 
$3.50.  Now  let  us  compare  those  $3.50  shoes  in  the  dealer's 
hands,  in  the  wearer's  hands,  and  Three  Dollars  and  a  half. 
Three  dollars  and  fifty  cents  is  the  value  in  each  case  from 
a  casual  view.  Yet  the  wearer  would  not  like  to  take  the 
currency  for  them,  and  the  seller  should  dislike  to  give  it. 
In  a  real  merit  or  utility  sense,  the  shoes  are  worth  less  than 
the  currency  in  the  hands  of  the  seller,  but  more  than  the 
currency  in  the  possession  of  the  wearer.  The  buyer  of  the 
shoes  may  have  sold  potatoes  to  get  the  currency.  The  cur- 
rency is  worth  more  than  his  potatoes  were  to  him.  Goods 
bought  are  worth  their  currency  cost,  plus  the  trouble  of 
buying.  Currency  is  worth  the  goods  sold  plus  the  trouble 
of  selling.  This  intermediate  esteem  of  currency  causes  it  to 
circulate,  to  become  current.  All  money  is  currency,  but  all 
currency  is  not  money. 

One  of  the  functions  of  money  then  is  to  flow  forward 
as  goods  flow  backward  from  seller  to  buyer ;  to  complete 
the  circuit  or  current  of  trade,  to  be  currency. 

The  other  function  is  to  pay  debts.  The  seller  delivers 
his  goods  to  the  buyer  upon  a  promise  to  pay  in  the  future. 
So  much  money  is  stipulated  to  be  paid.  Now  manifestly, 
to  be  a  just  payer  of  debts,  it  must  have  an  unchanging  value. 


234  RIGHT  AND  RICHES 

For  if  it  is  to  pay  for  goods  with  a  certain  market  value  or 
purchasing  power  at  the  time  of  sale,  the  payment  should 
have  the  same  purchasing  power  at  maturity,  no  more,  no 
less.  It  must  always  be  supposed,  too,  that  aside  from  the 
real  payment,  interest  is  given  as  a  consideration  for  wait- 
ing. Hence,  there  arises  an  office  in  a  "payer  of  debts" 
known  as  a  measure  of  value. 

Money  is  made  a  payer  of  debts  by  a  law  which  stip- 
ulates that  it  sJiall  be  taken  for  all  debts,  or  be  a  legal  tender. 
That  is,  that  the  tender  of  the  stipulated  money  is  made  a 
legal  fulfillment  of  the  obligation.  This  is  the  radical  dis- 
tinction between  "lawful  money"  and  such  things  as  checks 
and  drafts,  w^hich  are  usually  accepted  as  money,  but  may  be 
refused  at  flic  option  of  the  creditor.  Nevertheless,  such 
checks  and  drafts  arc  currency  to  the  extent  that  they  are 
taken,  to  the  extent  that  they  are  Current.  This,  then,  is 
the  radical  point  that  is  commonly  overlooked.  That  it  is 
compulsory  for  the  creditor  to  accept  niojicy  in  payment,  but 
not  other  currency. 

The  reason  that  this  point  is  so  extremely  important  is 
this :  because  the  whole  volume  of  Currency,  and  not  simply 
the  volume  of  legal  tender  money,  is  what  currently  or  nor- 
mally controls  the  value  of  currency,  including  legal  tender 
monev. 

I  would  like  to  impress  upon  the  reader's  mind,  for  it  is 
all  important  to  any  intelligent  consideration  of  money,  that 
the  total  volume  of  currency  controls  the  current  value  or 
money  price  of  things,  but  in  critical  times  this  volume  is 
reduced  to  the  fund  of  legal  tender  money. 

It  would  be  as  reasonable  to  think  that  the  anthracite 
coal  supply  alone  determines  the  price  of  all  fuel  in  Chicago 
or  St.  Louis,  as  to  think  that  some  part  of  the  volume  of 
money,  viz. :  the  fund  of  gold  or  even  the  total  fund  of  legal 
tender  money,  determines  the  value  of  money. 


CURRENCY  AND  MONEY  235 

The  fact  is  that  the  whole  vokime  of  currency  including 
checks  and  drafts  is  what  influences  the  value  of  money, 
the  value  of  a  dollar. 

We  hear  it  said :  "The  increased  supply  of  gold  has 
cheapened  money,  and  by  decreasing  its  purchasing  power, 
has  raised  prices  of  other  property,  but  we  need  more  cur- 
rency." It  would  be  quite  as  reasonable  to  say :  "The  pro- 
duction of  petroleum  has  so  cheapened  it  that  coal  cannot  be 
produced  to  compete  with  it ;  what  we  need  is  more  fuel." 

The  value  of  currency  at  a  given  date  is  dependent  on 
the  volume  of  currency  at  that  date.  The  zvhole  volume  of 
our  currency  then,  and  not  legal  tender  money  alone,  is  the 
measure  of  value.  Here  is  the  cause  of  all  our  financial 
troubles.  Values  are  measured  by  the  whole  volume  of  cur- 
rency, while  debts  are  payable  with  but  one  kind  of  cur- 
rency— legal  tender  money. 

In  good  times,  checks  and  drafts  based  on  credit  con- 
stitute the  larger  part  of  currency;  real  money  less  than 
half.  Debts  are  contracted  on  this  basis  of  value.  When 
depression  comes,  this  "optional  currency"  disappears,  leav- 
ing only  legal  tender  money  on  which  to  base  values  with 
which  debts  are  paid. 

A  perfect  money  will  have  a  constant  unchanging  value. 
A  perfect  system  of  money  will  reduce  the  percentage  of 
optional  currency  to  the  smallest  fraction  possible.  It  will 
dispense  with  nearly  all  currency  but  what  is  legal  tender. 

Any  money  which  is  not  a  real  measure  of  value  is  dis- 
honest money  whether  it  be  too  cheap  or  too  dear. 

No  money  based  on  a  metal  can  honestly  measure  value. 

No  material  thing  has  intrinsic  value.  It  has  only  value 
on  account  of  its  relation  to  general  desire  for  it,  and  the 
hindrance  of  its  supply.  Both  these  conditions  are  ever 
changing. 

We  can  at  a  given  time  compare  the  value  of  everything 
to  one  thing.    That  would  be  making  it  the  standard  of  com- 


236  RIGHT  AND  RICHES 

parison.  Suppose  we  compare  the  market  price  or  purchas- 
ing power  of  all  things  with  silver.  Having  once  done  this, 
say  on  the  1st  day-  of  January,  1907,  it  is  not  essential  to 
care  further  about  the  metal  silver,  but  only  the  ratio  thus 
deduced.  We  might  on  that  date  arbitrarily  declare  that 
helium,  a  metal  which  exists  in  the  sun  and  not  on  earth, 
was  worth  as  much  per  ounce  as  silver.  We  should  then 
have  the  following  table  of  value : 

1  cow    30  oz.  silver;  30  oz.  helium. 

1  horse    60  oz.  silver;  60  oz.  helium. 

1  ton  coal   10  oz.  silver;  10  oz.  helium. 

1  ton   iron    20  oz.  silver;  20  oz.  helium. 

1  bu.    wheat    1  oz.  silver;  1  oz.  helium. 

1  bu.   potatoes    5^  oz.  silver;  Yz  oz.  helium. 

1  lb.  butter    ^  oz.  silver;  Yz  oz.  helium. 

From  the  above  we  may  see  that  a  cow  is  worth  30  bush- 
els of  wheat,  60  pounds  of  butter,  3  tons  of  coal.  A  ton  of 
iron  is  worth  2  tons  of  coal,  40  pounds  of  butter,  etc.  Now  it 
is  apparent  that  we  may  make  the  comparison  just  as  com- 
pletely and  more  simply  if  we  drop  either  silver  or  helium 
from  the  table.  We  may  also  simplify  it  by  dropping  the 
word  "ounce."    We  now  have  the  following: 

1  cow  =  30  helium. 

1  horse  =60  helium. 

1  ton  coal      ^  10  helium. 
1  ton  iron      =20  helium, 
and  so  on. 

Now  we  have  1  helium  as  our  standard  of  value. 

One  looks  at  a  market  report.  He  sees  coal  has  dropped 
to  6  heliums,  iron  has  advanced  to  25  heliums,  butter  to  1 
helium.  Now  what  cares  he  whether  helium  exists  at  all, 
even  in  the  sun.  He  knows  that  he  can  now  buy  1  ton  of 
coal  with  6  pounds  of  butter.  That  to  pay  the  debt  of  15 
heliums  contracted  he  must  give  15  pounds  of  butter. 

This  is  almost  as  true  of  a  gold  standard.  A  gold  stand- 
ard is  a  fiction.     We  care  nothing  about  the  existence  of 


CURRENCY  AND  MONEY  237 

gold.  It  is  likewise  purely  fictitious  that  money  is  based  on 
it.  At  the  start  it  may  have  been,  but  we  have  now  only 
the  name,  not  the  substance,  as  a  basis. 

Jevons,  "Money  and  Exchange,"  Chapter  VIII  says: 

"Those  who  use  coins  in  ordinary  business  need  never 
inquire  how  much  metal  they  contain.  Probably  not  one 
person  in  two  thousand  in  this  kingdom  knows,  or  need 
know,  that  a  sovereign  should  contain  123.27447  grains  of 
standard  gold.  Money  is  made  to  go.  People  want  coin, 
not  to  keep  in  their  own  pockets,  but  to  pass  it  off  into 
their  neighbors'  pockets." 

Value  is  not  material,  but  mental. 

It  is  just  as  impossible  to  conceive  of  physical  substance 
as  a  measure  of  value  as  it  is  to  conceive  of  iron  or  wood 
having  a  certain  speed.  The  hind  wheel  of  a  carriage  has 
the  same  speed  as  the  front.  Gold  being  legally  exchangeable 
has  the  same  value  as  money.  Speed  is  not  a  quality  of  a 
material,  neither  does  it  produce  a  permanent  effect  on  it. 
It  is  a  relation  between  it  and  something  else. 

The  attempt  to  regulate  the  value  of  money  by  basing 
it  on  gold  is  a  failure.  It  would  only  be  possible  to  base  it 
on  the  natural,  changing-commodity  value  of  gold  by  con- 
tinuously redeeming  it  all  every  day  or  week.  The  value  of 
gold  is  kept  the  same  as  money  because  the  gold  may  be 
converted  into  money,  and  not  because  all  money  may  be 
converted  into  gold;  that  were  impossible,  for  money  is 
many  times  the  volume  of  gold. 

To  think  money  tributary  to  gold,  or  its  value  based  on 
gold,  is  as  far  removed  from  scientific  fact  as  to  think  the 
sun  tributary  to  the  earth,  and  that  it  revolves  around  the 
earth  daily.  This  is  the  basic  error  of  popular  financial 
thought.  One  may  expect  any  sort  of  theories  to  be  built 
upon  such  a  basis. 

As  a  sample,  it  is  asserted  that  this  supposed  basis,  gold, 
is  increasing  so  rapidly  as  to  depreciate  its  value  and  dislo- 


238  RIGHT  AND  RICHES 

cate  prices,  and  then  the  same  person  in  the  same  breath 
will  allege  a  shortage  or  scarcity  of  currency. 

Money  is  mistakenly  said  by  some  to  be  a  means  of  stor- 
ing value.  Were  a  ferry  taken  for  the  storage  of  coal,  should 
it  continue  to  be  a  ferry? 

While  coin  or  bills  are  in  hoarding  they  are  not  money. 
Money  must  be  current.  Standing  water  does  not  turn  a 
wheel,  neither  is  it  a  function  of  money  to  be  hoarded. 

Cars  are  to  move  freight.  Railroads  must,  indeed,  pro- 
vide a  greater  number  on  account  of  their  being  at  times 
converted  into  storage  places  by  shippers.  Many  means  are 
taken  to  prevent  this ;  demurrage  is  charged  of  so  much  for 
each  day  they  are  held.  Yet  at  times  we  witness  the  dis- 
tressing famines  in  coal  and  other  things,  resulting  from  cars 
being  idle  on  sidings  instead  of  performing  their  proper 
function. 

Now,  just  as  a  ferry  may  be  constituted  of  almost  any- 
thing that  will  float,  however  imperfect,  so,  many  things  may 
for  a  time  assume  the  ofhce  of  money ;  but  while  so  acting 
they  must  cease  to  perform  their  previous  function.  A 
yacht  may  make  a  fine  ferry,  but  it  may  not  be  used  for  a 
pleasure  cruise  without  interrupting  this  use. 

There  is  no  standard,  naturally  or  physically  evolved, 
that  may  be  taken  as  a  model  or  basis  for  money  any  more 
than  there  are  natural  ferries. 

In  Ideal  Money  may  in  progress  of  time  be  perfected, 
but  a  perfect  conception  of  ideal  money  is  impossible  while 
an  inverted  conception  of  business  is  held.  When  the  true 
purpose  of  industry  is  seen  to  be  to  confer  a  blessing  upon 
the  user  and  not  primarily  to  give  profit  or  pay  to  the  pro- 
ducer, then  the  true  idea  of  money  will  be  understood. 
Money  will  be  then  seen  to  be  a  certificate  indicating  that 
the  holder  has  contributed  so  much  toward  the  sum  of  hu- 
man happiness,  and  he  will  be  given  credit  b>^society  in  such 
an  amount  on  her  obligations  against  him. 


CURRENCY  AND  MONEY  239 

A  log  may  be  made  to  answer  for  a  ferry  in  some  de- 
gree. Tobacco  has  served  some  of  the  purposes  of  money. 
But  money  is  by  the  nature  of  its  functions  an  artificial 
establishment. 

Credit  is  transmuted  into  money,  but  while  so  acting  it 
truly  ceases  to  be  credit.  Money  cannot  be  credit ;  it  must 
be  cash. 

What  change  or  transformation  must  be  made  in  credit 
to  cause  it  to  act  as  money? 

It  must  be  changed  from  promise  into  fulfillment.  Credit 
is  a  promise  to  pay.  Money  is  "pay ;"'  its  very  essence  con- 
sists in  "pay."  A  piomise  to  pay  implies  future.  A  owes 
B  $1,000,  due  in  a  year,  yet  B  may  be  destitute  during  this 
year  notwithstanding  A's  promise  is  good.  Credit  to  be 
changed  to  money  must  be  divested  of  futurity,  even  of 
promise.  It  must  not  agree  to  pay,  hut  pay.  The  form  of 
printing  has  little  to  do  with  the  nature  or  function  of  what 
passes  current  and  so  constitutes  money.  A  currency  note 
may  read  that  the  maker,  whether  bank  or  government, 
"promises  to  pay,"  but  this  is  not  read  nor  considered  by 
takers  any  more  than  its  series  number.  It  becomes  money 
only  through  its  being  sought,  to  be  again  paid  to  seller  or 
creditor.  Whenever  money  is  sought  that  it  may  be  col- 
lected, or  that  its  tih-'tal  may  be  used  or  hoarded,  it  ceases  to 
be  money. 

How,  then,  is  credit  transformed  into  money?  By  some 
law  or  private  arrangement  or  common  consent,  which 
causes  a  certain  class  of  it  to  be  sought  by  all. 

A  usual  method  is  to  make  it  a  legal  tender  for  debts ; 
then  B  seeks  it  because  C  seeks  it  because  D  seeks  it  to  pay 
A,  and  A  seeks  it  because  B  seeks  it.  It  performs  a  circuit 
because  there  is  attraction  at  some  point  ahead  of  it  in  the 
circuit.  Exchanging  goods  for  money  is  not  barter,  for  the 
reason  that  money  is  a  "medium  relation"  of  property.    But 


240  RIGHT  AND  RICHES 

credit  which  has  general  acceptance  in  payment  for  goods, 
acquires  this  relation  until  liquidated. 

Suppose  you  wish  to  use  cloth  and  have  a  stock  of  po- 
tatoes which  you  do  not  wish  to  use.  You  will  not  trade 
your  potatoes  for  apples  unless  you  get  a  greater  market 
value  of  apples,  for  it  will  be  as  difficult  to  get  cloth  with 
apples  as  with  potatoes.  Neither  will  you  trade  your  po- 
tatoes for  a  note  due  in  a  year,  however  good,  unless  you 
get  it  at  a  discount  or  put  in  potatoes  above  the  market 
price;  for  to  get  cloth  with  it,  it  must  be  discounted.  But 
you  will  trade  your  potatoes  for  money,  because  money  has 
a  value  equal  to  your  potatoes,  plus  the  trouble  to  sell  them. 
And  you  know  it  has  a  value  to  the  cloth-owner  equal  to 
the  market  value  of  cloth,  plus  the  trouble  of  selling,  even 
while  it  has  a  value  to  you  equal  to  that  of  the  cloth,  less 
the  trouble  of  buying. 

Notes  (as  credit)  have  no  such  value.  No  one  wishes  a 
note  if  he  may  get  what  it  calls  for  instead.  He  will  only 
take  it  to  get  the  interest  promised. 

Suppose  a  stranger  in  Chicago  has  the  note  of  a  New 
York  millionaire  with  the  best  of  credit  for  $1,000  due  on 
demand  without  interest.  Will  he  not  have  to  discount  it  to 
2"et  the  money  at  once  ?  No  bank  will  cash  it  in  full  without 
some  consideration.  It  is  only  a  piece  of  property  surely 
worth  $1,000  in  New  York.     But  it  takes  time  to  collect  it. 

A  New  York  Bank  Currency  note  is  taken  by  any  bank 
from  any  one.  There  is  no  thought  of  being  obliged  to  collect 
it.  It  is  not  simply  worth  $1,000  but  is  $1,000,  not  only  in 
New  York  but  in  Chicago  or  San  Francisco  nozv. 

Money  is  positive  wealth ;  credit  is  not  wealth  at  all  be- 
cause it  is  a  negation.  Money  seeks  a  seller,  credit  a  payer. 
Money  is  wealth  because  it  is  a  means  of  exchange  or  use, 
just  as  a  telephone  is  by  being  a  means  of  communication. 
As  electricity  embraces  less  power  than  the  steam  which 
generated  it  and  more  power  than  it  is  possible  to  apply  to 


CURRENCY  AND  MONEY  241 

ultimate  use,  but  is  yet  invaluable  because  so  readily  con- 
verted to  any  purposes  desired,  even  so  money,  though  of 
less  value  than  the  property  by  which  we  acquire  it,  is  in- 
dispensably useful  because  it  may  be  readily  converted  into 
the  multiform  thing's  we  desire. 

Credit  involves  a  Debit.  There  is  no  debit  to  money. 
The  following  analogy  illustrates  this :  Credit  is  like  a 
vacuum  seeking  to  consume  or  swallow  a  certain  quantity 
of  matter.  It  is  a  minus  quantity.  Money  is  like  a  chemical, 
sulphur,  for  instance.  Sulphur  is  a  true  element,  a  positive 
element.  It  is  obtained  by  inducing  another  element  such 
as  calcium  to  part  with  it,  which  is  done  at  a  certain  cost. 
Many  elements  having  a  "desire"  or  affinity  for  sulphur 
will  give  up  the  substance  they  hold  and  take  the  sulphur 
instead.  Sulphur  is  not  a  minus  quantity.  Its  positive  ac- 
tion on  the  element  causes  it  to  release  the  desired  substance. 
It  is  then  recovered  and  the  process  repeated.  This  use  of 
sulphur  is  very  extensive  in  the  arts.  Sulphur  is  a  chem- 
ical medium  of  exchange. 

Money  has  a  greater  affinity  with  sellers,  and  less  with 
buyers,  than  have  goods.  This  is  why  it  circulates.  Money 
depends  for  its  value  on  the  limitation  of  its  supply.  Credit 
depends  for  its  value  on  payment.  People  look  to  the  payee 
for  the  value  of  credit ;  to  the  seller  and  creditor  for  the 
value  of  money.  Paying  credit  destroys  it.  Money  is  not 
lessened  by  being  paid  over.  The  purchasing  power  of 
money  is  increased  with  its  decrease  in  volume,  but  its  debt- 
paying  power  is  not  increased. 

Credit  as  credit  will  not  be  sought  without  it  bear  inter- 
est. As  money  it  must  not  bear  interest,  else  the  interest  will 
become  an  attraction  to  draw  it  aside  from  its  current,  and 
cause  it  to  be  hoarded.  A  note  of  one  bank  to  another  is  an 
active  debt.  But  its  issue  of  "money  notes"  is  not  a  debt  as 
long  as  it  continues  to  circulate.     Holders  of  such  notes  do 


242  RIGHT  AND  RICHES 

not  seek  the  bank  for  their  vahie,  but  sellers,  creditors  and 
tax  collectors. 

Some  one  has  proposed  to  allow  the  whole  volume  of 
credit  to  circulate,  but  only  a  limited  quantity  will  circulate. 
The  supply  must  be  so  limited  that  money  seekers'  demand 
for  it  will  be  so  strong  as  to  make  up  for  lack  of  interest. 
Simple  credit  due  in  a  year  will  only  be  taken  at  a  discount 
of  2,  4  or  6%.  If  due  on  demand  it  will  be  presented  at 
once  for  cancellation  as  are  checks.  But  with  legal-tender 
power  to  make  it  money,  it  may  never  be  presented.  This  is 
in  a  measure  fixed  money,  the  same  pieces  staying  in  circu- 
lation some  time.  Checks  act  as  money,  but  checks  are  very 
transitory,  they  are  canceled  within  an  hour,  or  a  day,  or 
a  week.  Perhaps  their  volume  may  be  twice  as  much  to- 
morrow as  to-day,  or  only  half  as  much. 

We  need  a  certain  dependable  volwne  of  "fixed"  money. 
Why?  Because  transitory  money  has  a  tendency  to  sud- 
denly disappear  and  cause  disaster. 

The  value  of  bank-checking,  based  on  deposits,  depend- 
ing on  loans,  is  questionable.  A  great  volume  of  money 
of  any  kind  is  not  especially  desirable.  The  desirable  thing 
is  steadiness  of  value.  "Fixed"  money  should  be  perman- 
ently and  definitely  fixed.  The  quantity  should  be  wisely 
and  unselfishly  controlled  so  as  to  insure  constant  value. 

The  value  of  money  is  inverse  to  the  ratio  of  its  volume 
with  the  demand  for  it. 

There  are  many  theories  about  this  ratio.  Mill  says  its 
value  is  inverse,  with  the  ratio  of  its  volume,  to  the  volume 
of  trade.  This  is  commonly  accepted  by  economists  as  the 
correct  statement  of  the  basis  of  money's  value,  but  this 
relates  solely  to  its  "present-competitive-value"  or  "cur- 
rency-value." The  most  important  value  of  money  to  be 
controlled  is  its  future  or  speculative  value. 

But  even  the  currency  value  of  money  is  not  its  ratio  to 
the  "volume  of  trade."  if  bv  that  is  meant  the  total  volume 


CURRENCY  AND  MONEY  243 

of  exchanges ;  for  the  volume  of  exchanges  may  be  increased 
or  multiphed  without  regard  to  the  volume  of  present  wealth 
or  present  property.  The  "volume  of  exchanges"  may  be 
increased,  or  even  multiplied,  by  exchanging  evidences  of 
debt.  On  the  other  hand,  the  facility  of  exchange  may  be 
much  greater  at  one  time  than  another,  enabling  exchanges 
to  be  made  much  more  rapidly ;  hence,  in  greatly  increased 
volume  with  the  same  amount  of  money  in  a  given  period. 
A  dollar  moving,  or  changing  hands  more  rapidly,  transfers 
more  goods  a  day  or  week,  just  as  does  a  car  moving  more 
rapidly. 

Let  us  look  at  this  proposition  from  an  individual  stand- 
point. How  much  money  will  a  man  commonly  have  on 
hand?  Obviously  on  the  average,  he  will  have  an  amount 
in  proportion  to  his  assets,  and  not  in  proportion  to  the 
amount  that  passes  through  his  hands.  Hence,  with  in- 
crease of  wealth  among  the  individuals  of  the  community, 
that  is  among  the  multitude,  the  average  people,  there  is  a 
tendency  to  keep  more  money  on  hand.  So  the  demand  is 
increased.  But  this  tendency  continues  only  until  the  indi- 
vidual reaches  a  certain  degree  of  affluence  after  which  he 
begins  to  depend  largely  on  his  personal  accounts  and  checks. 
This  class  is  a  minority,  however,  whose  fortunes  consist 
less  of  real  wealth  than  of  credits  or  concessions. 

Now  this  is  not  only  true  of  money,  but  of  any  commo- 
dity. People  have  more  carpets  or  more  books  or  glass  in 
proportion  to  the  increase  of  wealth.  Hence,  increase  of 
wealth  increases  the  "currency  value"  of  money,  if  its  vol- 
ume remains  the  same.  Increase  of  its  volume  decreases  its 
currency  value,  unless  there  is  general  increase  of  wealth. 

From  this  we  may  deduce  the  following  law  of  the 
volume  of  money :  The  volume  of  money  should  be  in  one 
continuing  proportion  to  the  real  Wealth  of  the  coniniunity. 

But  currency's  speculative  value  is  what  makes  the  big 
demand.     The  present  real  value  of  wheat  may  be  60  cents, 


244  RIGHT  AND  RICHES 

yet  by  excessive  sales  on  futures  the  "shorts"  may  be  made 
to  pay  75  cents.  The  "short"  selHng  of  money — debt — is 
many  times  that  of  any  other  species  of  thing.  Everyone 
who  gives  his  "promise  to  pay"  is  selHng  money  for  future 
deHvery.  Mill  neglects  to  take  into  consideration  this  de- 
mand— the  use  which  causes  the  most  desperate  demand  for 
money,  that  of  paying  debts. 

Now,  what  is  debt? 

It  is  a  contract  to  deliver  a  certain  quantity  of  a  certain 
species  of  property.  Contracts  are  continually  made  to  de- 
liver so  many  bushels  of  wheat,  corn  or  oats,  so  many  shares 
of  a  certain  corporation's  stock  on  a  certain  future  day.  It 
quite  commonly  happens  that  these  contracts  to  deliver, 
taken  in  the  aggregate,  exceed  all  expectations,  and  when 
those  who  make  them  seek  to  fulfill  their  obligation  they 
find  the  market  thronged  with  others  trying  also  to  get  the 
same  things.  The  sellers  are  said  to  be  "short"  on  the  mar- 
ket. This  competition  for  a  particular  commodity,  say 
wheat,  is  not  to  get  it  to  grind,  to  be  eaten,  but  to  fill  these 
contracts.  In  common  parlance  the  wheat  market  is 
"bulled"  or  overcontracted.  Thus  prices  may  be  jumped 
50%  or  more  above  what  physical  conditions  warrant. 

I  know  of  no  market,  nor  any  use  for  buckeyes,  the  seed 
of  the  beautiful  tree  scattered  through  the  woods  of  the  Mis- 
sissippi Valley.  They  fall  off  the  tree  and  rot.  It  would  be 
no  trouble  for  farmers  in  many  localities  to  pick  up  a  bushel 
of  them.  They  could  easily  afford  to  do  it  for  twenty-five 
cents.  But  suppose  a  market  gambler  should,  in  the  summer 
quietly  contract  for  several  million  bushels  of  buckeyes  at 
fifty  cents.  It  matters  not  whether  he  had  the  least  idea  of 
using  them.  He  could  easily  make  contracts  with  a  farmer 
in  any  district  where  they  are  common,  to  deliver  fifty  to  a 
hundred  bushels,  as  each  would  think  he  could  go  out  and 
pick  them  up  without  trouble ;  but  when  in  the  fall  he  en- 
countered dozens  of  others  also  after  them,  he  would  hunt 


CURRENCY  AND  MONEY  245 

up  the  man  he  had  contracted  with  and  try  to  substitute 
apples,  bushel  for  bushel.  If  he  could  not,  he  would  ofifer 
two  bushels  of  apples  for  one,  then  five  or  ten  bushels  of 
apples  or  potatoes  or  wheat,  or  ten  dollars  in  money  for 
every  bushel  of  buckeyes  he  had  agreed  to  deliver  for  half 
a  dollar.  He  would  now  be  at  the  mercy  of  his  creditor, 
the  buyer,  or  of  those  who  might  have  buckeyes. 

Likewise  is  money  of  final  payment,  that  which  is  con- 
tracted to  be  delivered  when  we  promise  to  pay  "dollars." 
Nothing  but  legal  tender  will  do.  We  cannot  tell  how  much 
others  have  contracted  to  deliver  at  the  same  time,  but  we 
may  be  sure  it  is  many  times  the  total  amount  of  legal  tender 
in  existence. 

Now,  if  all  these  deliveries  are  quietly  made,  and  each 
of  the  creditors  pay  out  again  what  is  delivered  without  de- 
lay, and  it  is  passed  on  to  fulfill  other  contracts,  no  harm 
comes ;  but  if  the  creditors  foolishly  or  maliciously  lock  it 
up  for  a  month  or  a  year  in  a  safe  deposit  box,  we  are  at 
the  mercy  of  our  creditors. 

Here,  then,  is  the  vital  factor  in  the  value  of  money. 

The  value  of  money  is  no  more  based  on  gold  than  the 
value  of  cloth  is  based  on  the  production  of  silk.  The  de- 
mand for  silk  depends  on  its  use  for  cloth.  It  belongs  to  the 
cloth  group.  People  desire  cloth  fabrics  for  many  purposes. 
Cloth  of  cotton,  wool,  linen  or  many  other  fibres  may  be 
substituted  for  silk.  The  "group"  is  what  desire  seeks. 
The  desire  for  money  has  no  relation  to  any  material  what- 
ever, but  to  a  group  of  entities  however  constituted  that  will 
be  accepted  by  others. 

Now  this  acceptance  is  of  two  classes,  voluntary  and 
compulsory.  This  is  the  vital  point  so  often  overlooked. 
Whatever  is  voluntarily  accepted  is  currency.  Checks, 
drafts  and  various  other  forms  of  promise  are  usually  ac- 
cepted voluntarily  and  act  as  currency.  But  the  other  class 
— the  only  class  which  is  money  of  contract — compulsory 


M6  RIGHT  AND  RICHES 

money,  money  of  last  resort,  must  be  made  a  legal  tender 
by  law.  This  is  the  only  part  of  the  volume  of  currency 
which  creditors  can  be  made  to  take  in  fulfillment  of  the 
enormous  volumes  of  debt,  of  contracts  for  future  delivery 
of  money,  periodically  made  in  such   tremendous  volumes. 

Were  it  not  for  debts  for  payments  contracted  to  be  made 
in  the  future,  we  could  well  leave  the  volume  of  money  to 
regulate  itself.  It  would  then  do  so  automatically,  for  when 
the  volume  became  proportionately  too  large  as  compared 
with  demand,  its  value  per  unit  would  be  less,  and  vice 
versa. 

Nothing  is  honest  money  that  can  be  retired  or  diverted 
from  the  debt-paying  supply  in  critical  times.  The  supply 
of  currency  should  as  nearly  as  possible  consist  wholly  of 
legal  tender.  Redeemable,  or  retirable  notes,  changeable 
volumes  of  checking  accounts  are  all  alike  dangerous. 

The  "banker"  economists  ridicule  the  words  "legal  ten- 
der," yet  legal  tender  is  a  vital  element  of  money.  Checks 
and  drafts  are  not  legal  tender.  They  are  but  "half  money." 
Legal  tender  may  be  termed  "whole  money,"  because  it  has 
the  whole  function  of  money,  viz. :  currency  and  debt-paying 
power. 

Checks  cannot  be  made  to  pay  debts  without  the  consent 
of  the  creditor.  Moreover  checks  may  be  issued  in  excess 
of  banks  actual  legal  tender  holdings  only  as  borrowers' 
deposit  notes.  Debts  under  our  present  system  increase 
with  increase  of  trade.  But  when  credit  is  withdrawn, 
loans  cancelled,  and  the  power  of  issuing  checks  reduced 
to  the  volume  of  actual  legal  tender,  and  legal  tender  even 
more  greatly  reduced  by  the  retiring  of  bank  issues,  we 
are  then  left  ruinously  short  of  currency  to  conduct  busi- 
ness with  or  money  to  pay  debts.  Credit  indeed  responds 
to  the  usual  trade  demands  of  currency,  but  not  to  the 
crisis  debt  demands.    Even  coin  is  then  hoarded. 


CURRENCY  AND  MONEY  247 

It  is  then  plainly  desirable  that  a  much  larger  share  of 
money  be  money  of  last  resort,  legal  tender,  which  cannot 
be  redeemed  or  canceled ;  and  a  much  smaller  share  "half- 
money." 

Credit  is  not  an  unmixed  good.  Any  credit  which  is 
fictitious,  which  is  not  for  real  productive  capital,  is  an  evil 
and  should  be  discouraged.  No  artificial  encouragement 
should  be  given  to  private  banks  of  deposit.  Government 
should  maintain  banks  in  connection  with  the  Postoffice, 
where  deposits  could  be  made  and  checked  upon.  Bank- 
note money  is  a  crime,  for  it  can  be  put  in  circulation  only 
by  being  borrowed  by  someone.  The  banks  still  keep  a 
"string  on  it."  Bank  loans  should  be  greatly  reduced  by 
requiring  heavy  reserves.  This  reduction  of  currency  by 
consequent  reduction  of  checking,  should  be  replaced  by  the 
direct  government  issue  of  "whole  money." 

Money  has  ever  and  universally  been  issued  according  to 
convenience  or  accident.  Usually  large  volumes  have  been 
issued  by  both  banks  and  governments  to  get  the  profits  or 
benefits  of  credit  without  paying  interest ;  to  dishonestly  get 
something  for  nothing,  for  it  is  as  dishonest  to  try  to  steal 
interest  as  principal.  Franklin  protested  against  such  issue 
by  the  Colony  of  Pennsylvania,  when,  while  their  issue  was 
stable,  it  was  proposed  to  increase  it  to  raise  an  Indian 
war  fund.  Franklin  insisted  on  the  issue  of  bonds  whose 
interest  rate  should  cause  them  to  be  hoarded  and  tiius 
prevent  them  from  flooding  the  currency  market.  During 
the  Civil  War  some  blundering  money-issuing  was  done  by 
the  issue  of  "interest-bearing  money."  Had  only  the 
needed  currency,  increase,  if  any,  been  made,  and  then 
credit  had  been  obtained  by  interest-bearing  bonds,  the 
money  and  bonds   should  both   have  maintained  par  with 


gold. 


16- 


S48  RIGHT  AND  RICHES 

Our  present  currency  is  entirely  founded  on  the  false 
basis  of  credit. 

The  gold  standard  is  entirely  a  fiction.  This  is  the  cause 
of  panics.     Money  should  be  divorced  from  credit. 

Mr.  R.  H.  Patterson,  a  very  eminent  English  economist 
and  opponent  of  the  specie-basis  system,  says : 

"If  much  gold  happens  to  come  into  the  country,  the  note 
circulation  is  likely  to  be  increased  to  a  corresponding  extent; 
if  gold  is  withdrawn  from  us,  the  note  circulation  is  propor- 
tionately diminished.  If,  owing  to  a  temporary  cause,  all  the 
gold  available  for  monetary  purposes  were  sent  abroad,  all  our 
paper  money  would  likewise  disappear,  and  the  country  be  left 
without  money  of  any  kind.  A  more  absurd  theory  was  never 
propounded.  If  metallic  money  fails  us,  we  are  on  no  account  to 
use  any  other.  This  we  are  told  to  regard  as  a  masterpiece  of 
economical  science;  this  is  the  great  discoverj'^  which  our  ad- 
vances into  civilization  have  revealed  to  us.  The  gospel  of 
monetary  science  now  is,  that  when  a  country  does  not  want 
paper  money,  it  ought  to  have  a  great  supply  of  it;  and  when  it 
does  require  paper  money  it  shall  have  none.  When  a  country 
has  enough  of  specie,  it  ought  to  double  its  currency  by  issuing 
an  equal  amount  of  bank-notes,  and  when  there  is  no  specie, 
there  should  likewise  be  no  notes.  Is  it  necessary  to  discuss 
such  a  theory?  In  order  to  be  refuted  it  needs  only  to  be 
stated;  in  order  to  be  rejected  it  only  needs  to  be  understood. 
It  is  a  theoretical  monstrosity  against  which  common  sense 
revolts — a  burlesque  of  reason,  which  even  the  present  genera- 
tion will  live  to  laugh  at." 

Money  should  not  be  redeemable  in  gold,  or  anything 
else.  In  the  name  of  common  sense,  why  should  we  expect 
to  need  less  money  in  a  year,  or  at  any  future  time? 

To  provide  for  retiring  it  is  as  foolish  as  would  be  the 
action  of  a  city  government  which  should  pave  the  street 
with  blocks  provided  with  rings  for  the  attachment  of  der- 
ricks, that  they  might  be  easily  removed  and  piled  up  when 
not  further  needed. 

Should  there  be  a  flexible  currency? 

Should  a  yard  measure  be  made  of  elastic? 


CURRENCY  AND  MONEY  249 

Some  maintain  that  there  is  a  critical  time  in  each  year 
when  money  is  in  special  demand.  I  doubt  it.  If  this  were 
found  after  exhaustive  inquiry  to  be  true,  it  could  be  reme- 
died by  requiring  a  slightly  less  reserve  to  be  kept  by  banks 
at  such  seasons.  But  I  have  heard  no  argument  on  this 
season  of  increased  demand  that  sounded  reasonable.  When 
there  is  a  large  crop  the  demand  for  credit  for  speculating 
is  no  doubt  greater. 

It  is  said  that  in  harvest  time  the  banks  in  the  farming 
communities  withdraw  their  deposits  from  the  Wall  Street 
banks  to  be  loaned  to  farmers  to  pay  laborers.  But  why 
permit  banks  in  the  country,  where  money  is  supposed  to  be 
lacking,  to  deposit  their  funds  in  the  centers  where  there  is 
already  such  excess  of  it  as  drives  men  mad? 

Hpw  silly  is  the  cry,  on  the  one  hand,  for  the  issue  of 
money  to  pension  soldiers,  or  for  "what  not"  purposes,  other 
than  the  needed  supply  of  currency,  and  on  the  other,  the 
contention  for  a  "gold  basis."  There  is  no  scientific  reason 
for  the  free  coinage  of  silver  other  than  the  fact  that  two 
commodities  fluctuate  less  than  one,  and  that  silver  money 
would  not  have  to  be  borrozucd  to  get  into  circulation,  as 
bank  notes  must,  for  coined  silver  would  be  paid  out  in  in- 
dustry, but  banks  may  not  pay  out  their  notes  except  on 
loans.  This  was  the  principal  objection  of  the  bankers  to 
free  silver.  There  has  been  since  1894  a  greater  inflation 
through  banknote  issue  than  would  have  occurred  with  free 
coinage.  Every  dollar  of  these  banknotes  had  to  be  bor- 
rowed from  the  banks,  and  observe  the  result  of  this  debt 
volume  in  the  present  panic. 

Credit  evidenced  by  checks  becomes  current  for  Short 
terms  transferring  property.  Hence,  such  checks  are  cur- 
rency. Bankers  and  governments  really  convert  credit, 
evidenced  by  notes,  into  currency.  These  notes  must  be 
for  proper  sums  and  payable  to  bearer  on  demand  without 
interest.     If  not  payable   until   a   distant   future,   they  will 


250  RIGHT  AND  RICHES 

only  be  taken  at  a  discount.  When  bearing  interest  they 
will  not  be  parted  with,  but  kept  for  the  interest.  But  such 
notes,  during  the  time  they  are  currency,  cease  to  be  credit. 
Although  the  issuer  is  liable  for  their  payment,  it  is  only 
when  they  cease  to  circulate.  The  citizen  of  Texas  who 
holds  a  note  issued  by  a  Maine  bank  cares  nothing  for  the 
bank.  He  looks  not  to  the  bank  for  pay,  but  to  the  mer- 
chant, whose  goods  he  will  buy  with  it.  Money  as  long  as 
it  is  money  seeks  property  to  buy,  or  creditors,  and  not 
redemption.  But  notes  are  a  dangerous  and  imperfect  form 
of  money.  There  was  never  a  greater  lie  put  into  circula- 
tion than  that  anyone  in  1896  was  afraid  silver  money 
would  not  be  good. 

Too  many  people  conclude  that  no  one  but  bankers  know 
about  the  science  of  money.  These  same  people  leave  city 
government  to  grafters.  Aside  from  their  interests,  suc- 
cessful business  men  are  likely  to  know  less  of  the  prin- 
ciples of  money  than  poorer  persons. 

There  is  also  a  large  "party"  of  stupid  persons,  animated 
by  prejudice  against  those  who  are  provident  enough  to 
have  Capital  loaned  out,  who  howl  against  banks  and  Wall 
Street  without  knowing  why,  and  clamor  for  the  govern- 
ment to  issue  unlimited  volumes  of  money  to  be  loaned  to 
farmers  at  2%,  or  to  be  used  to  buy  all  the  railroads,  or 
dredge  rivers,  or  what  not.  These  gentlemen  commonly 
have  long  hair,  and  they  somewhat  strengthen  the  cause  of 
banks  by  their  talk. 

When  one  advocates  that  money  be  issued,  either  to  give 
banks  or  government  credit,  he  is  ignorant  of  the  first  prin- 
ciples of  money,  or  is  "interested."  No  less  does  it  show 
ignorance  to  think  that  interest  rates  depend  on  the  volume 
of  money.  I  know  that  the  Bank  of  England  claims  other- 
wise, but  it  gets  millions  of  pounds  in  interest  out  of  its 
claim. 


CURRENCY  AND  MONEY  251 

Rationai,  Money. 

What  are  the  chief  requisites  of  a  nation's  currency? 

First :  It  should  by  all  means  be  issued  designedly — for 
the  purpose  of  currency — and  not  inadvertently  or  incident- 
ally as  a  means  of  saving  interest,  boosting  prosperity  or 
patronizing  a  powerful  class.  An  intelligent  city  will  not 
trust  its  water  supply  to  chance,  but  employs  expert  en- 
gineers to  calculate  it.  Why  should  there  be  no  predeter- 
mination in  this  alone  of  the  most  vital  instruments  of  so- 
ciety? Money  should  not  be  provided,  as  some  persons 
build  walks — when  they  have  cinders  to  get  rid  of. 

Second :  The  money  supply  should  be  one  consistent 
scheme.  One  complete  comprehensive  unity,  planned  and 
instituted  solely  for  the  performance  of  its  peculiar  func- 
tions ;  not  a  haphazard  patchwork  of  incident  and  accident. 
To  this  end,  the  devising  of  a  currency  to  be  substituted  for 
our  present  blundering,  crazypatch  currency,  should  be  given 
over  to  a  body  of  men  learned  in  economics,  and  having  no 
members  who  are  interested  in  banks  or  stock  manipulation. 

Third :  It  should  have  a  constant  value  by  means  of  a 
constantly  maintained  ratio  to  the  volume  of  wealth. 

Fourth  :  It  should  be  divorced  from  credit. 

Fifth  :  It  should  be  sure. 

Sixth :  It  should  be  convenient  of  transfer. 

Seventh :  Its  volume  should  be  free  from  any  changes 
resulting  from  variations  in  confidence  or  credit.  No  change 
in  its  volume  should  be  possible,  except  the  changes  deter- 
mined by  the  commission  in  charge  of  it,  and  they  should 
be  limited  to  a  very  small  percentage  in  any  year. 

Eighth :  No  private  interest  should  in  any  manner  con- 
trol or  assist  in  its  issue  or  retirement. 

Ninth :  Its  value  should  be  entirely  divorced  from  that 
of  any  metal  or  commodity.     It  should  be  made  chiefly  of 


252  RIGHT  AND  RICHES 

paper,  a  material  of  nominal  cost,  and  the  incidental  profit 
should  of  course  go  to  the  nation. 

Tenth :  As  nearly  as  possible,  everything  but  legal  tender 
money  should  be  eliminated  from  the  volume  of  currency  by 
the  discouragement  of  debt. 

'T  would  change  the  form  of  these  notes,  so  that  instead 
of  being  technically,  or  in  form,  a  promise,  they  should  have 
stamped  upon  them  the  denomination  as  gold  and  silver 
have." — Senator  Wright,  of  Iowa,  U.  S.  Senate,  43d  Con- 
gress ;  Congressional  Record,  Vol.  II,  page  751. 

When  a  correct  basis  for  money  has  been  adopted  then 
let  some  properly  constituted  branch  of  the  treasury  pay 
this  safe  and  honest  money  to  the  people  through  the  retire- 
ment of  bonds  and  other  legitimate  disbursements  for  public 
improvements,  etc.,  until  the  whole  present  volume  of  bank- 
notes and  redeemable  currency  should  be  replaced  or  such 
volume  as  scientific  research  should  determine  as  desirable. 

Beyond  the  volume  needed  to  maintain  its  constant 
value,  government  should  not  issue  money,  and  it  should 
pay  a  good  fair  rate  of  interest  for  all  credit. 

The  stock  argument  against  irredeemable  money  is  that 
governments  are  liable  to  over-issue.  Are  they  more  liable 
than  banks  to  do  so? 

But  however  imperfect  a  means  of  gauging  the  money 
value  we  adopt,  is  it  reasonable  to  expect  that  it  would 
be  better  than  to  leave  the  whole  matter  of  value  and  volume 
to  chance ;  to  changing  conditions  which  tend  to  increase  the 
volume  when  it  is  already  too  great  and  to  reduce  it  still 
more  when  it  is  too  low  ? 

Any  tariff  or  impost  taxation  tends  to  complicate  the 
currency  problem  by  withdrawing  a  large  percentage  of  the 
currency  as  surplus  in  the  treasury,  which,  in  effect,  is  ex- 
actly the  same  as  canceling  it  during  the  time  it  is  so  with- 
drawn from  circulation,  as  is  recognized  by  everyone.  The 
banks  like  this,  for  they  get  free  government  deposits.    With 


CURRENCY  AND  MONEY  253 

a  national  system  this  surplus  could  be  kept  down  to  a  frac- 
tion of  the  year's  expenditures. 

The  monetary  commission  referred  to  should  work  along 
with  the  treasury.  Should  money  depreciate  in  value,  pur- 
chases by  government  should  be  decreased  and  the  money 
so  saved  turned  into  a  hoard  or  reserve  for  the  purpose. 
Should  money  increase  in  value,  government  purchases 
should  be  increased  to  pay  out  this  hoard  and  any  additional 
issue  of  currency  required.  It  is  a  most  rational  plan,  on 
all  accounts,  for  governments  of  all  kinds  to  do  the  most 
work  in  the  dullest  times,  when  it  may  not  alone  be  done 
more  cheaply  but  will  tend  to  revive  business.  Interest  is 
also  lower  in  dull  times. 

Even  with  our  unnatural  tax  system,  a  measure  of  suc- 
cess could  be  made  by  the  issuance  of  bonds  payable  on  de- 
mand. They  should,  of  course,  bear  more  than  2%  when 
stripped  of  their  use  as  security  for  bank  issues,  and  when 
payable  on  demand,  else  they  would  find  no  sale.  Any  bond 
should  bear  more  than  2%.  No  community  fit  to  live  in  can 
have  an  interest  rate  so  low  as  2%  ;  5%  is  nearer  a  normal 
rate  of  interest. 

Should  the  surplus  in  the  treasury  grow  too  large,  these 
bonds  could  be  called  and  paid  in  legal  tender.  Should  a 
deficit  occur  in  the  treasury,  these  demand  bonds  should  be 
issued  to  make  it  good,  and  so  keep  the  volume  of  money 
constant. 

The  great  English  financial  writer,  Thomas  Atwood, 
says: 

"Contrast  all  the  dangers,  the  changes,  the  fluctuations,  the 
unjust  ruin,  the  unjust  aggrandizement  attendant  upon  a 
metallic  standard  with  the  security,  the  equality  of  prices  and 
of  values,  the  exemption  from  unjust  losses  and  from  unjust 
gains,  and  the  general  stability  of  all  profits  and  of  all  prosperity, 
which  a  non-convertible  paper  currency  presents,  self-existent, 
self-dependent,  liable  to  no  foreign  actions,  entirely  under  our 


254  RIGHT  AND  RICHES 

own  control;  contracting,  expanding  or  remaining  fixed  accord- 
ing as  the  wants  and  exigencies  of  the  community  may  require — 
a  non-convertible  paper  currency  presents  every  element  of 
national  security  and  happiness  without  the  possibility  of  in- 
juring any  one  class  of  the  community.  By  it  we  may  forever 
insure  a  wholesome  range  of  prices,  neither  too  high  nor  too 
low,  but  securing  at  all  times  the  due  reward  of  industry  to  the 
productive  classes,  and  the  due  distribution  of  mutual  rights  and 
interests  among  ail  other  classes  of  the  community.  I  have  re- 
flected upon  the  subject  for  twenty  years;  I  have  continually 
turned  it  in  my  mind  in  a  thousand  shapes  and  ways,  and  I  still 
most  firmly  retain  the  opinion  above  expressed.  And  one  im- 
portant fact  I  ought  to  mention,  in  confirmation  of  this  opinion. 
I  have  never  met  one  single  individual  who  has  had  leisure  and 
disposition  to  turn  his  thoughts  to  this  subject  who  has  not 
fully  adopted  the  same  opinion  in  the  end. 

"If  these  arguments   are   wrong,   is   it  not  strange   that  no 
one  has  ever  been  found  to  point  out  their  error?" 


CHAPTER  III. 

Credit. 

HE  word  credit  denotes  two  very  distinct  entities. 
When  one's  promise  of  future  payment  is  potent 
to  obtain  property,  either  by  reason  of  a  good 
character,  or  on  account  of  possessing  such  assets 
that  one  may  be  compelled  to  pay,  such  person  is  said  to 
have  credit.  The  more  correct  or  definite  terms  for  this 
ability  to  obtain  credit  are  credence,  credibility  or  trust- 
worthiness. 

When  one  holds  the  promise  or  obligation  of  another, 
or  has  a  balance  at  a  bank — a  clearing-house  of  credits — he 
thereby  owns  a  portion  or  share  in  the  present  or  future 
wealth  of  the  community.  We  might  term  this  "latent  title" 
partnership,  or  undivided  interest  in  property,  existing  in, 
or  accruing  to,  the  possession  or  stewardship  of  persons, 
perhaps  unknown  to  the  creditors,  who  owe  a  correspond- 
ing debt  or  obligation  to  deliver  it.  This  is  a  meaning  far 
from  the  other,  though  the  two  are  usually  confused.  The 
first  is  but  the  ability  to  contract  debts.  The  latter  is  an 
ownership  of  property  as  yet  unapportioned. 

"Confidence"  is  that  condition  of  thought  which  gives 
credence.  Fear  destroys  confidence.  But  confidence  refers 
not  alone  to  giving  credence  to  persons ;  it  is  not  alone  the 
faith  in  the  trustworthiness  of  persons,  but  faith  in  the  suc- 
cess of  enterprises.  The  value  attaching  to  property  de- 
pends on  confidence.  Panics  annihilate  wealth  by  destroy- 
ing confidence. 

It  is  often  mistakenly  asserted  that  there  is  as  nnich  real 
wealth  in  the  country  after  as  before  a  panic.  It  is  not  so. 
The  real  wealth  is  the  general  estimate  of  the  importance  of 
things,  goods  or  enterprises. 

255 


256  RIGHT  AND  RICHES 

Credit,  latent-title,  accrues  temporarily  to  different  in- 
terests with  the  output  of  wealth.  The  growth  of  a  crop 
means  a  credit  to  the  land-owner  and  tenant. 

The  steel  company  sells  its  product,  for  which  it  secures 
to  itself  in  return  the  transfer  of  credit  in  banks.  If  its 
business  is  profitable  its  stockholders  have  a  credit  accruing 
for  which  the  company  transfers  this  credit  to  them  in  divi- 
dends. This  credit,  latent-title,  is  constantly  accruing  to 
owners  of  capital,  concession  or  loan  obligations.  This 
quasi-title  is  floated  or  transferred,  either  by  the  transfer 
of  the  promises,  the  debt-obligations  of  debtors;  by  the 
handing  about  of  the  specific  notes  or  bonds,  or  by  trans- 
ferring by  checks  the  debits  of  banks  guaranteed  by  the 
pooled  promises  held  by  banks,  from  their  debtors. 

Credit  is  a  promise  to  deliver.  It  involves  a  promisor 
called  a  debtor,  and  a  promisee  called  a  creditor.  A  date  of 
delivery  may  be  stipulated  or  left  to  the  option  of  either 
party.  A  loan  that  may  be  paid  or  declared  due  at  any  time 
is  termed  a  Call  Loan.  The  property  promised  may  be 
specified,  or  only  a  certain  value  promised,  the  kind  to  be  de- 
termined at  delivery. 

We  deliver  our  baggage  to  a  carrier  and  get  a  check 
promising  to  redeliver  to  us  the  certain  trunks  or  pieces. 
Wheat  is  delivered  to  elevators,  and  receipts  taken  promis- 
ing so  many  bushels  of  the  same  quality,  but  not  the  same 
specific  wheat.  These  receipts  are  bought  and  sold  more 
largely  than  the  specific  wheat. 

In  rural  districts  it  is  quite  common  for  one  person,  who 
is  known  at  the  general  store,  to  give  in  exchange  for  labor 
or  goods,  an  unspecific  order  on  such  store ;  not  for  so  much 
flour  or  sugar,  but  for  so  much  value  of  any  goods  selected. 
He  will  pay  the  store  at  harvest.  Department  stores  in 
cities,  commonly,  upon  the  return  of  goods  not  desired,  issue 
a  credit  check  of  like  nature  to  such  orders. 


CREDIT  257 

The  promise  to  pay  money,  while  legally  specific,  is  not 
so  in  general  practice.  Few  notes  are  actually  paid  in 
money.  Most  are  paid  by  giving  another  form  of  credit 
due  on  demand — checks.  The  holder  of  a  note  may,  in  some 
instances,  even  be  able  to  demand  gold,  a  special  kind  of 
money;  but  this  power  is  rarely  enforced.  Money  is  de- 
manded in  time  of  panic,  to  some  extent,  but  not  universally, 
else  few  should  escape  bankruptcy. 

Credit  is  not  capital,  but  its  principal  use  is  to  procure 
capital.  One  may  buy  a  diamond  or  a  coat  with  debt.  This 
simply  implies  that  he  expects  that  wherewith  to  pay,  either 
from  his  salary  or  other  income. 

Interest  is  usually  charged  for  credit.  When  one  fur- 
nishes funds  or  goods  and  waits  a  year,  he  charges  in  addi- 
tion to  the  cash  price  the  current  rate  of  interest.  Hence, 
the  borrower  cannot  consistently  borrow  except  he  put  the 
results  of  such  borrowing  to  procuring  him  increase  where- 
with to  pay  such  interest. 

I  may  buy  one  piano  and  hold  it  a  year  and  return  it 
with  6  per  cent,  interest  added,  for  I  have  had  that  much 
pleasure  from  the  music ;  so  that  I  take  the  interest  from 
my  other  income.  But  if  I  may  be  able  to  sell  them  at  10 
per  cent,  above  what  I  pay,  I  can  buy  a  thousand  pianos  and 
pay  G  per  cent,  interest  thereon,  for  by  distributing  them  to 
users  I  add  to  their  value.    They  are  my  capital. 

Credit  is  largely  given  for  capital.  A  wishes  horses  and 
equipment  to  grow  crops.  B  has  them,  but  he  has  not  faith 
in  A's  ability  to  redeem  his  promise  to  pay  for  them  at  har- 
vest. But  when  C,  in  whom  he  Jias  faith,  endorses  A's 
promise  to  pay,  he  takes  it  for  the  capital  A  wishes.  C 
thereby  gives  A  credence  wherewith  to  get  capital.  Now  if 
A  succeeds  in  growing  a  valuable  harvest,  he  may  through 
exchange  redeem  his  promise  to  B.  and  thereby  he  may 
then  obtain  some  credence  with  A  on  his  own  account. 


258  RIGHT  AND  RICHES 

A  feature  of  credit  overlooked  is  this :  That  while  cred- 
it is  primarily  based  on  some  species  of  tangible  property, 
such  as  lands,  merchandise,  etc. — either  existent  or  to  be 
produced,  which  is  looked  to  as  a  means  of  payment — this 
credit  in  common  practice  comes  to  be  largely  superimposed 
upon  other  credit.  For  instance :  A  has  tangible  assets,  land 
for  instance,  of  a  value  of  more  than  $10,000.  He  gives  B 
a  mortgage  on  this  land  for  $10,000 ;  B  puts  up  this  mort- 
gage as  collateral  at  a  bank  and  gets  a  checking  account  of 
$10,000.  He  has  his  check  certified  for  this  amount  at  the 
bank,  and  puts  it  up  as  security  with  D  for  stocks  worth 
$10,000.  Now  here  are  four  $10,000  credits  based  on  an 
original  $10,000  of  property.  In  actual  practice,  this  repe- 
tition of  credit  goes  much  further,  even  to  ten  or  more  times. 
Banks  extend  a  credit  to  borrowers  of  more  than  ten  times 
the  actual  money  in  their  vaults. 

In  every  community  there  are  those  with  sums  of  credit 
that  they  do  not  immediately  need  to  spend.  Salaried  persons 
save  part  of  their  salaries.  Merchants  have  not  use  for  their 
daily  receipts  until  certain  demands  mature.  Farmers  sell 
their  crops  and  have  no  need  for  the  proceeds  until  new  crops 
are  to  be  planted  or  improvements  made.  A  dealer  in  credits 
borrows  from  several  hundred  these  small  sums  of  credit 
and  money  aggregating,  say,  $10,000  at  little  or  no  interest. 
With  this  accumulated  sum  he  buys  from  the  lumberman  the 
note  of  the  builder ;  from  the  grain  grower,  the  note  of  the 
stockfeeder;  from  the  factory,  the  note  of  the  merchant;  he 
also  loans  money  to  the  brickmaker  to  pay  for  labor  and  fuel 
to  complete  his  kilns  of  brick ;  the  ice  man  to  store  his 
houses  with  ice,  and  so  on.  Now  the  sellers  of  these  notes 
do  not  immediately  need  all  the  cash,  but  they  simply  allow 
the  credit  dealer  to  owe  them  the  amounts  due  on  demand 
or  upon  their  written  order. 

It  may  be  that  the  grain  grower  wishes  to  buy  more  land 
and  it  will  be  months  before  he  gets  what  suits  him.     It 


CREDIT  259 

will  perhaps  take  the  factory  some  weeks  to  pay  out  the  pro- 
ceeds of  the  note  given,  for  wages  or  supplies.  The  lumber- 
man may  not  wish  to  pay  for  new  stock  for  weeks,  hence 
the  credit  dealer  will  not  need  to  pay  out  all  of  the  $10,000 
he  borrows  in  order  to  secure  $10,000  of  notes.  He  may  buy 
at  least  $40,000  of  notes  therewith. 

When  the  manufacturer  pays  his  men  they  will  pay  the 
money  to  the  merchants,  who  at  once  deposit  it  with  him 
again.  So  of  payments  made  by  all  other  borrowers.  Such 
credit  dealer  is  called  a  banker.  Many  persons  think  a 
banker  must  be  very  rich  to  loan  so  much.  But  they  forget 
that  he  may  be  borrowing  quite  as  much  as  he  is  loaning. 

A  banker  needs  to  be  able  to  judge  how  much  to  loan 
of  what  he  has  borrowed,  by  guessing  how  much  redeposit- 
ing  will  be  done  and  how  much  checking  out.  He  must  also 
study  applicants  for  loans  to  determine  what  credence  they 
should  have.  But  being  a  banker  does  not  tend  to  give  a 
knowledge  of  national  finances  any  more  than  being  a  black- 
smith does. 

But,  it  may  be  asked,  how  can  one  deposit  abstract  credit 
in  a  bank? 

By  depositing  checks,  notes  or  drafts. 

How  does  this  help  the  bank?  It  enables  the  bank  to 
make  loans,  to  give  checking  accounts  to  customers,  and 
take  the  responsibility  of  meeting  their  checks  with  part  of 
the  cash  on  hand,  because  it  has  these  credit  resources  to 
realize  on  if  required,  by  rediscounting  them. 

Is  a  bank  of  use  in  a  community?  Yes.  It  serves  peo- 
ple in  various  ways.  First,  it  furnishes  a  safe  storage  for 
funds,  allowing  them,  at  the  same  time,  to  be  more  conven- 
iently paid  out  by  check  without  the  trouble  of  counting,  or 
the  risk  of  loss  in  delivery.  Second,  it  is  a  means  of  making 
the  capital  of  those  who  do  not  wish  to  use  it,  available  to 
those  who  do. 


260  RIGHT  AND  RICHES 

Now  the  lumberman  could  not  hunt  up  several  hundred 
persons  with  dribs  of  money  in  order  to  get  $5,000.  If  he 
went  to  them  they  might  not  trust  him,  or  they  would  not 
be  willing  to  lend  for  any  definite  time.  The  banker  bor- 
rows these  sums  and  by  having  so  many  is  able  to  take 
chances  on  lending  a  definite  sum  for  a  definite  time,  it  being 
likely  that  if  one  calls  for  his  deposit,  another  will  make  one 
as  great.  He  needs  only  to  keep  a  certain  percentage  of  re- 
serve. Most  people  are  not  afraid  to  trust  him.  He  virtual- 
ly endorses  the  loan  to  the  lumberman. 

Suppose  a  library  is  formed  by  borrowing  ten  books 
from  each  of  5,000  persons,  each  of  whom  may  now  have 
the  use  of  50,000  books  instead  of  ten.  A  loan  library  is  a 
"book  bank."  A  livery  stable,  if  it  borrowed  its  rigs,  would 
be  a  conveyance  bank.  This  plan  is  proposed  with  freight 
cars.  A  pool  would  borrow  all  idle  cars  for  a  day  or  year 
— however  long  the  owners  had  no  need  of  them — and  re- 
loan  them.  This  principle  gives  the  great  efficiency  to  Pull- 
man cars.     They  are  diverted  to  the  line  of  heavy  traffic. 

The  business  of  production  and  distribution  would  be 
much  hampered  if  deprived  of  banks.  A  producer  may  not 
have  great  wealth,  yet  he  finds  that  retailers  desire  "time" 
if  they  buy.  He  can  take  their  notes  if  he  may  discount 
them.  But  he  may  even  need  to  borrow,  so  as  sufficiently 
to  finish  his  stock  as  to  begin  selling.  The  banker,  seeing 
the  progress  of  his  stock,  may  readily  lend  him  credit  to 
pay  wages  and  for  supplies.  He  must  at  the  start  have 
money  to  build  his  plant,  or  borrow  it  for  some  years  on 
bonds  or  mortgages. 

A  bank's  principal  dealings  are  in  credit — in  simple  ab- 
stract promises  to  pay,  not  money,  though  the  stipulation  is 
so  written ;  but  to  pay  value,  goods,  wealth,  property.  A 
farmer  sells  his  hogs,  a  miner  his  ore,  a  merchant  his  wares ; 
they  may  simply  get  credit,  promises  to  pay,  notes  or  checks. 
These  they  turn  over  to  the  credit  storehouse,  the  bank,  to 


CREDIT  261 

keep  until  they  wish  specific  property,  or  to  cancel  their 
debts.  When  one  sells  anything  it  is  sufficient  to  get  a 
check,  an  interest  in  "demand  credit."  He  may  then  trans- 
fer it  to  others,  in  exchange  for  what  he  desires  to  enjoy 
or  use  for  capital. 

But  credit  is  not  capital.  Neither,  if  one  get  from  the 
bank  actual  currency,  has  he  acquired  capital.  Yet,  while 
neither  money  nor  credit  is  capital,  they  are  the  most  con- 
venient means  with  which  to  secure  it. 

Suppose  you  wish  to  go  into  manufacturing.  You  either 
have,  or  by  some  means  secure,  a  balance  or  credit  at  a 
bank  for  $20,000.  Now,  according  to  common  parlance,  you 
have  so  much  capital,  but  according  to  strict  economic  terms 
you  have  but  the  means  of  getting  it  as  you  require  it.  With 
this  you  buy  stocks  of  "raw  material"  and  such  machinery 
and  other  equipment  as  you  require.  You  require  workmen. 
These  fashion  the  raw  material  into  useful  shape. 

At  the  end  of  a  week  or  a  month  they  have  thus  added 
several  hundred  dollars  of  value  to  it.  These  workmen 
thereby  acquire  an  interest  or  credit  in  the  wealth  being 
thus  developed.  Say  their  share  is  now  $1,000.  You  buy  it 
by  paying  them  wages.  To  do  this  you  must  have  other 
credit  to  transfer  to  them,  with  which  they  may  buy  what 
they  see  fit.  How  do  you  get  this  credit?  Naturally  you 
sell  the  product  and  get  a  transfer  of  the  buyer's  credit  at 
the  bank. 

But  suppose  you  simply  deposit  your  note  at  the  bank 
and  give  the  workmen  checks.  They  may  with  these  checks 
procure  food  from  the  grocer,  coal,  shoes,  lumber,  etc.,  from 
dealers,  or  pay  installments  on  land— in  short,  procure  sub- 
sistence as  well  as  to  make  other  uses  of  them,  the  recipients 
perhaps  indirectly  buying  the  output  of  your  factory  there- 
with. But  this  does  not  constitute  this  subsistence  "cap- 
ital," for  when  bought  for  consumption  it  is  no  longer  cap- 
ital. 


262  RIGHT  AND  RICHES 

This  variety  of  goods  bought  by  employes  is,  however, 
wealth — whether  berries  or  vegetables  picked  to  their  order 
in  exchange  for  credit.  By  this  credit  acting  temporarily 
as  currency,  this  variety  of  goods  is  "fluxed."  or  made  to 
flow  to  balance  the  $1,000  product  taken  over  by  you. 

Now,  while  it  could  not  be  expected  in  practice  that  the 
various  dealers  receiving  them  would  return  any  great  por- 
tion of  your  checks  to  you,  yet  they  will  in  fact  return  all 
the  credit  indirectly  to  employers  generally ;  so  we  see  that 
through  credit  the  wealth  of  the  gardener  is  transmuted  in- 
directly into  manufacturers'  capital,  in  the  shape  of  part  of 
your  week's  output,  by  his  taking  the  wage  checks  which  he 
may  convert  into  capital  for  himself  by  buying  part  of  it — 
perhaps  a  plow. 

A,  B  and  C  are  depositors  at  a  bank,  have  a  balance.  E 
borrows  from  it  to  pay  for  his  stock  of  merchandise.  Hence, 
A,  B  and  C  are  indirect  title-owners  in  E's  stock.  They 
may  buy  portions  of  it,  and  by  checks  to  E  enable  him  in  a 
measure  to  liquidate.  In  this  indirect  way,  owners  of  credit 
have  a  sort  of  indirect  title  in  the  goods  of  debtors. 

It  should  always  be  remembered  that  what  is  received 
by  the  debtor  as  a  consideration  for  his  promise  is  a  distinct- 
ly different  parcel  of  property  from  that  which  he  agrees  to 
return  in  payment.  What  he  receives  may  be  capital,  per- 
sonal enjoyment  or  the  satisfaction  of  other  debt ;  what  he 
expects  to  pay  with  may  be  the  proceeds  of  crops  or  manu- 
factured goods.  Thus  millions  and  millions  of  credit  repre- 
sent nothing  but  the  power  to  absorb  wealth  yet  to  be  cre- 
ated. 

Debt  beyond  a  very  limited  amount  is  a  great  evil.  It 
leads  those  of  poor  judgment  to  extravagance.  Debts  ma- 
ture, sometimes  suddenly,  and  tremendous  volumes  simul- 
taneously. Confidence  is  destroyed,  debtors  lose  their  cred- 
ence. Awful  loss  and  bankruptcy  result.  It  is  then  that 
the  legal  phase  of  the  contract  is  partially  enforced  which 


CREDIT  263 

requires  a  specific  commodity ;  money,  or  even  a  specific 
kind  of  money,  gold.  Values  of  all  odier  diings  are  thereby 
sacrificed. 

Laws  should  be  changed  to  remedy  the  very  foundation 
of  credit.  A  correct  money  system  would  be  one  of  the 
remedies. 

But  aside  from  the  money  question,  credit  vitally  de- 
mands to  be  studied. 

If  everyone  could  realize  that  it  is  quite  as  dishonest  to 
needlessly  delay  the  payment  of  an  account,  as  to  fail  en- 
tirely to  pay  part  of  it ;  this  would  greatly  reduce  the  debt 
volume.  The  risks  of  mercantile  business  are  more  than 
doubled  by  the  necessity  to  carry  needless  accounts,  and 
there  is  no  surer  foundation  precept  of  success  in  business 
than  for  one  to  hasten  to  pay  ones  debts  at  the  earliest 
moment. 

The  economy  to  the  public  by  increased  use  of  money 
through  banking,  reminds  me  of  the  boy  and  the  jam. 

"My  son,"  said  this  boy's  mother,  "isn't  it  rather  an  ex- 
travagance to  eat  butter  with  that  superb  jam?" 

"No,  ma'am,  it's  an  economy,"  the  boy  answered,  "the 
same  piece  of  bread  does  for  both." 

Beyond  a  reasonable  volume,  the  benefit  of  banking  is, 
that  it  makes  the  same  piece  of  coin  serve  the  banker  to 
soak  up  many  times  as  much  of  the  people's  good  things, 
taken  as  interest. 


17- 


CHAPTER  IV. 

Banks  and  Panics. 

"The  work  of  righteousness  shall  be  peace,  and  the 
effect  of  righteousness,  quietness  and  assurance  forever." 

— Isaiah. 

A — The  Recent  Panic — Its  Cause. 

B — Demand  for  and  Supply  of  Capital. 

C — Dilation  of  Concession  Value. 

D—The  Part  the  Banks  Play. 

B — Banking  Laws. 

P — The  Remedies. 

A— THE  RECENT  PANIC— ITS  CAUSE. 

O    banks    promote    panics?     Are    those    cataclysms, 
which  bring  loss  and  destruction  of  wealth  to  all 
classes,  whether  patrons  of  banks  or  not,  caused 
either  by  the  reprehensible  actions  of  bankers,  or 
by  the  inherent  wrongs  of  the  banking  system  as  legalized? 
But,  first,  what  is  a  panic?  « 

A  panic  is  a  paroxysm  of  fear.  It  follows  a  period  of 
prosperity;  but  is  it  an  essential  consequence  of  such  pros- 
perity? 

The  recent  panic  has  been  productive  of  much  interest- 
ing discussion  and,  as  might  have  been  expected,  the  views 
given  are  much  biased  by  the  business  and  connections  of 
the  reviewers.  Among  the  many  causes  suggested  are  the 
following : 

First.     "Lack  of  sufficient  money." 

Second.  "Use  of  capital  more  rapidly  than  it  was  being 
produced,  causing  inability  to  procure  capital  for  future  de- 
velopment." 

264 


BANKS  AND  PANICS  265 

Third.  "Lack  of  an  elastic  currency." 
Fourth.  "Excessive  wages  demanded  by  unionism." 
Fifth.  The   widespread   thought   that   prosperity   should 
"just  naturally"  be  followed  by  depression. 

Sixth.  General  extravagance  among  the  people. 
Seventh.  The  scare  caused   by  prosecution  of  corpora- 
tion crime. 

None  of  these  suggestions  offer  a  solution  of  the  prob- 
lem. Such  widespread  and  depressing  fear  is  attributable 
neither  to  incidental  occurrences  nor  to  normal  activities 
however  intense.  Such  fear  indicates  deep-seated  and  dan- 
gerous unrighteousness. 

The  first  assumption — the  insufficient  supply  of  money — 
is  mistakenly  inferred  from  the  increasing  interest  rate.  The 
second,  because  the  price  of  securities  fell.  The  causes  of 
the  panic  were  obviously  conditions  accompanying  the  pre- 
vious   strenuous    prosperity. 

What  is  prosperity? 

Webster  defines  it  as  success ;  well  being ;  happiness, 
stripped  of  certain  parasitical  conditions  which  accompany 
it ;  national  prosperity  means  that  people  are  advancing  to- 
ward their  rightful  condition  of  peace  and  plenty. 

But  many  adverse  phenomena  commonly  accompany  it. 
You  often  hear  it  said  that  a  town  is  prosperous  which  has 
many  saloons.  Here  is  a  sequence  which  is  not  a  conse- 
quence, but  the  reverse.  A  prosperous  city  will  give  sup- 
port to  more  saloons  than  a  dead,  dull  place,'  but  this  does 
not  change  the  fact  that  the  saloons,  far  from  making  a 
place  richer,  make  it  much  poorer. 

Likewise,  a  large  volume  of  debt  is  likely  to  accompany 
prosperity,  but  this  volume  of  debt  does  not  promote  pros- 
perity, as  many  are  deluded  into  thinking,  but  hinders  and 
finally  destroys  it. 

Prosperity  does  not  imply  debt. 


266  RIGHT  AND  RICHES 

During  prosperity,  however,  there  occurs  the  natural 
expansion  of  industry;  simultaneously  there  is  likely  to  be 
more  or  less  inflation  of  debt.  A  panic  is  the  collapse  of 
this  inflation ;  and  this  collapse,  like  some  terrible  explosion, 
is  destructive  of  all  property  values. 

Is  inflation  essential  to  expansion? 

It  seems  to  be  quite  commonly  conceded  that  it  is;  so 
much  so  that  the  two  terms  are  confusedly  used  as  synonyms. 
It  is  time  for  a  little  careful  thinking  along  this  line. 

We  have  expressions  from  supposed  "masters  of  finance" 
showing  that  even  they  are  deluded  by  this  illusion.  The 
parent  of  this  absurd  thought  is  the  common,  mistaken  no- 
tion that  wealth  must  be  loaned  to  become  capital.  This 
arises  from  the  fact  that  the  ordinary  person  is  ready  to 
admit  that  he  knows  nothing  of  the  great  mystery(?)  of 
finance,  and  to  fall  down  on  his  knees  to  the  banker  and  al- 
low him  to  do  all  his  thinking  on  the  question. 

Now,  bankers  are  simply  men,  biased  by  their  interests 
and  warped  by  the  phenomena  most  common  to  them.  In 
their  daily  business,  bankers  see  wealth  applied  as  capital 
solely  through  the  process  of  loans ;  ergo,  they  come  to  for- 
get that  only  a  fraction  of  the  capital  which  contributes  to 
industry  is  borrowed.  Hence,  arises  the  delusion  that  Credit 
and  Capital  are  synonymous.  The  logical  conclusion  from 
this  fallacious  premise  is,  that  the  more  prosperity  we  have 
the  more  credit,  hence,  the  more  debt  we  must  have. 

The  author  has  no  prejudice  against  bankers.  They  are 
not  worse  than  men  in  other  lines,  nor  more  likely  to  try  to 
conspire  against  the  common  good.  However,  they  are  able, 
more  effectively  than  men  in  other  lines,  to  influence  legis- 
lation for  their  selfish  purposes,  because  of  this  willingness 
of  people  to  admit  that  financial  matters  are  a  mystery  be- 
yond them.  Further,  they  are  liable  to  do  infinitely  greater 
damage  by  their  selfish  dictation  of  legislation,  because  of 
the  more  vital  character  of  financial  matters.    Labor  unions, 


BANKS  AND  PANICS  267 

farmers,  or  mine  owners,  are  no  doubt  as  likely  to  try  to  get 
special  legislation;  but  people  do  not  concede  to  them  all 
knowledge  in  their  respective  lines;  hence,  evil  results  are 
sooner  recognized. 

There  is  no  delusion  more  widespread  nor  mischievous 
than  that  an  accumulation  of  credits  increases  capital  or 
helps  business.  Suppose  there  is  $1,000  ov^ing  from  A  to 
B  and  from  B  to  C  and  from  C  to  D  and  from  D  to  E  and 
from  E  to  F  and  from  F  to  G  and  from  G  to  H  and  from 
H  to  I  and  from  I  to  A.  There  would  then  be  $10,000  of 
credit.  Would  it  not  be  a  good  thing  if  a  clearance  could 
be  made  and  the  whole  thing  wiped  out?  If  each  creditor 
held  a  note,  this  might  be  done  by  passing  I's  note  from  A 
to  B,  B  to  C  and  so  on  down  the  line  until  I  held  it  himself. 
He  could  then  destroy  it.  By  this  simple  means  of  clear- 
ance a  burden  would  be  lifted  from  ten  debtors,  $10,000  of 
credit  would  be  wiped  out,  yet  with  great  benefit  to  both 
creditors  and  debtors. 

Banks  recognize  the  advantage  of  clearing  their  own 
debts;  hence,  they  have  clearing-houses  to  cancel  all  debts 
among  themselves  that  may  be  cancelled.  Of  the  total  mil- 
lions of  international  business,  all  but  the  smallest  fraction 
is  canceled  in  this  way.  This  fraction  represents  the  inter- 
national foreign  investments  of  individuals. 

But  the  permission  given  banks  to  issue  millions  of  cur- 
rency, which  they  can  keep  in  circulation  only  by  having  a 
corresponding  volume  of  notes  due  them,  necessitates  this 
immense  volume  of  debt  that  is  uncancelable.  The  collec- 
tion of  a  vast  surplus  by  the  iniquitous  tariff  system  of  taxes 
and  by  other  careless  and  haphazard  means  of  State  and 
municipal  revenue,  which  surplus  is  deposited  in  banks  for 
long  periods  pending  disbursement,  is  the  basis  of  other  tre- 
mendous volumes  of  unclearable  debt. 

But  while  an  increasing  volume  of  debt  is  not  essential 
nor  helpful  to  prosperity,  still  our  "paternal  laws"  operate 


268  RIGHT  AND  RICHES 

to  cause  its  increase  with  the  increase  of  prosperity,  while 
the  natural  tendency,  if  not  frustrated  by  these  paternalistic 
laws,  would  be  exactly  the  reverse.  Most  important  of  such 
laws  are  the  laws  confirming  concession,  and  those  granting 
favors  to  banks,  for  debt  consists  largely  of  the  price  of 
land,  of  bonds  representing  franchises,  and  notes  for  bank 
credits  borrowed. 

Before  we  may  hope  to  account  for  panics,  we  must  come 
to  a  better  understanding  of  the  distinctions  between  Credit 
and  Capital,  between  Money  and  Capital,  between  Credit  and 
Money,  between  Credit  and  Confidence. 

The  relations  between  money,  credit  and  capital  may 
seem  illusive  and  baffling.  A  great  demand  for  capital  is 
often  mistaken  for  a  demand  for  money.  A  lack  of  confi- 
dence is  mistaken  for  a  lack  of  capital  or  money.  The  na- 
ture and  identity  of  each  is  generally  confused.  Each  has 
more  the  nature  of  a  stream  which  rises  and  falls  than  that 
of  fixed  objects. 

Is  there  an  equipoise  or  normal  relation  between  the  vol- 
ume of  capital,  credit  and  money?  If  so,  what  relative  vol- 
ume of  credit  may  safely  exist,  as  compared  to  the  volume 
of  capital?  What  volume  of  money  is  needed  as  compared 
to  the  volume  of  capital  ?  What  permanent  increase  of  con- 
cession value  is  possible  as  compared  to  increase  of  output? 

There  is  between  these  classes  of  property,  and  between 
each  of  them  and  the  whole  volume  of  property  in  general 
a  proportion  which,  when  disregarded,  results  in  disorganiza- 
tion of  business.  The  volume  of  capital  must  not  become 
too  small  as  compared  with  the  whole  volume  of  property, 
nor  the  volume  of  credit  too  large  in  proportion  to  that  of 
capital.  If  these  ratios  are  kept  normal  and  the  supply  of 
money  is  not  contracted  nor  inflated  by  legislative  changes  or 
the  manipulation  of  the  banking  interest,  credit  will  auto- 
matically regulate  itself. 


BANKS  AND  PANICS  269 

It  is  most  important  to  the  understanding  of  these  ques- 
tions that  we  recognize  detinitely  what  each  of  these  terms 
include.  Credit  is  die  reverse  side  of  debt.  There  can  be 
no  increase  of  one  without  an  equal  increase  of  the  other. 
Capital  is  wealth-property  applied  to  increase  output.  Capital 
is  concrete.  It  has  weight  and  bulk.  It  consists  solely  of 
a  "stock"  of  somethinof  useful,  or  becoming  useful,  or  the 
apparatus  used  in  handling  such  "stock."  It  is  not  some- 
thing created  with  ink  and  paper. 

Persons  go  into  debt  for  capital  and  for  other  property ; 
such  debt  causes  credit  to  accrue  to  him  who  loans,  but  the 
ownership  of  capital  is  not  in  any  sense  dependent  on  bor- 
rowing. 

Owners  of  capital  do  not  have  to  loan  it  in  order  to  apply 
it  to  production.  They  may  apply  it  themselves,  either  per- 
sonally or  by  transferring  it  to  a  corporation  for  its  stock. 
No  debt  is  incurred  by  this  means.  Debt  is  in  no  degree  an 
essential  to  any  phase  of  production,  though  "wise  ones" 
often  assume  that  it  is.  Capital  is  an  essential  to  Produc- 
tion, but  capital  does  not  arise  from  debt.  It  arises  from 
devotion  of  wealth  to  aid  production.  Wealth  is  a  stream 
from  output.  It  accrues  to  Laborer,  Capitalist,  and  Conces- 
sionist.  These  may  consume  it  or  employ  it  in  production. 
Credit  and  debt  come  about  by  a  number  of  persons  becom- 
ing borrowers  of  property,  and  another  number  becoming 
lenders,  or  what  is  the  same,  a  number  buying  property  on 
time  from  others  who  sell  on  time. 

But  such  buying  or  borrowing  is  not  essentially  for 
capital.  A  user  of  capital  is  not  necessarily  a  borrower. 
Divorce  from  your  thoughts  all  notion  that  money  is  capital. 
Now,  if  the  amount  of  borrowing  becomes  abnormally  large, 
credit  becomes  strained.  But  remember  that  borrowing  is 
not  limited  to  borrowing  for  capital ;  in  fact  a  tremendous 
portion  of  debt  is  not  for  Capital  but  for  Concession.  A  class 
of  debt  that  goes  far  toward  bringing  on  trouble  is  that  for 


270  RIGHT  AND  RICHES 

land.     But  debt  for  stocks  or  bonds  is  more  dangerous  to 
the  public. 

When  credit  is  strained;  when  it  is  hard  to  borrow  or 
renew  loans,  it  is  not  because  capital  is  scarce.  It  is  because 
debt  has  become  excessive;  because  the  debtor  class,  the 
borrowing  or  buying-on-credit  class,  has  become  too  numer- 
ous or  has  contracted  debt  out  of  proportion  to  the  capital 
owned  by  them ;  because  there  has  been  too  many  farms  cut 
into  lots  and  sold  at  fictitious  prices — too  many  franchises 
capitalized  and  the  slock,  subject  to  too  heavy  bond  issues, 
unloaded  onto  the  public;  because  too  much  debt  has  been 
made  both  for  capital  and  for  property  other  than  Capital, 
for  property  which  gives  no  increase  with  which  to  meet 
interest  and  repay  principal.  It  is  because  criminal  stock 
jobbing  has  become  so  notorious  as  to  destroy  the  capital- 
owner's  conMence  in  corporate  issues,  as  in  the  recent 
panic ;  because  real  estate  prices,  through  speculation,  have 
become  double  what  output  of  wealth  will  pay  rent  on,  as 
in  some  previous  inflations;  because  too  large  a  percentage 
of  output  is  taken  by  idlers  as  rent  or  accessage,  and  with- 
held from  the  capital  fund  until  borrowed. 

Debt  and  credit  are  created  entirely  aside  from  produc- 
tion and  industry.  \  has  $100,000  of  property — wheat,  cot- 
ten,  merchandise,  land;  B  signs  a  note  to  him  for  $50,000 
for  half  of  it,  and  C  for  the  other  half.  Here  is  no  increase 
of  property,  no  increase  of  capital,  no  increase  or  decrease 
of  money,  but  $100,000  increase  of  debt.  Credit  and  debt 
do  not  imply  an  increase,  but  a  transfer  of  wealth,  or,  per- 
haps, only  a  transfer  of  a  quantity  of  other  credit  evidences. 

Credit  and  debt  are  promises  independent  of  all  indus- 
trial operations.  The  "bull"  element  encourages  debt;  the 
"bear"  element  discourages  it.  Debt  is  normally  reckoned 
to  be  paid  from  that  for  which  it  was  incurred ;  the  principal 
from  its  sale  and  the  interest  from  its  increase  of  value,  or 
increase  of  product.    If  for  capital,  the  profit  of  the  industry^ 


BANKS  AND  PANICS  271 

or  if  for  land,  the  rent  is  expected  to  exceed  the  interest. 
But  much  debt  is  for  that  which  produces  no  income  or 
output,  being  incurred  with  the  gambhng,  or  speculative 
desire  to  get  something  for  nothing. 

Vacant  property  is  bought  with  expectation  of  increase 
in  value.  Corporate  shares  which  pay  little  or  no  dividends 
are  bought  in  hope  of  expansion.  Increase  in  prices  of 
franchises  and  land  is  limited  by  increase  in  the  general 
output  of  wealth  in  the  community.  On  the  whole,  however, 
increase  in  such  prices  can  exceed  ordinary  interest  rates 
for  but  very  limited  periods. 

Buying  on  expectation  of  a  rise  in  prices  is  speculation. 

All  debt  must  be  for  something  giving  an  increase,  or 
some  one  must  lose.  If  borrowing  becomes  too  excessive 
panic  must  be  the  inevitable  result.  Speculation  is  likely  to 
"accompany  prosperity :  if  too  general  it  causes  adversity. 

All  interest,  all  rent,  all  profit,  all  enhancement  of  values, 
as  well  as  all  wages,  must  be  paid  from  the  output  of  in- 
dustry. Hence,  when  debt,  which  generally  draws  interest, 
gets  out  of  proportion  to  output,  trouble  surely  follows. 

Debt  has  always,  and  rightly,  been  regarded  as  an  evil 
to  be  kept  to  the  smallest  bounds  ;  yet  government,  influenced 
by  bankers  and  stock-jobbers,  creates  the  occasion  for  most 
of  our  debt  volumes ;  and  this  banking  interest,  through  a 
sympathetic  press,  would  make  people  believe  debt  a  blessing. 

How  lacking  in  shame  are  the  banks,  vv^hen  a  crisis  comes, 
to  turn  down  in  cold  blood  applications  for  loans  made 
by  patrons,  and  at  the  same  time  appeal  to  the  patriotism 
of  those  who  have  balances  due  them,  not  to  withdraw  them. 
What  an  evidence  of  rottenness  in  our  financial  system,  that 
such  an  unnatural  system  is  authorized. 

The  extent  to  which  productive  exchange  is  hampered 
by  lack  of  the  medium  of  exchange  is  grossly  exaggerated. 
It  is  hindered,  even  paralyzed,  by  panics.  Ignorance,  greed, 
dishonesty  and  fright — do  stop  the  circulation  of  commerce. 


372  RIGHT  AND  RICHES 

even  as  physical  excesses  do  the  circulation  of  the  blood; 
and  a  system  of  finance  that  has  become  weakened  by  arti- 
ficial stimulation,  succumbs  most  quickly.  While  it  used  to  be 
contended  that  workingmen  needed  stimulating  drinks  at 
their  work,  this  theory  now  has  few  supporters,  even  in  Ger- 
many. Likewise  people  will  some  day  learn  that  artificial 
currency  stimulation  results  in  stagnation,  paralysis. 

Production  would  not  be  one  iota  less  if  banks  were 
required  to  hold  at  all  times  even  60%  of  their  deposits  in 
legal  tender  money.  True,  they  would  lose  6%  or  7%  on 
billions.  Individuals  can  and  will  at  all  times,  except  dur- 
ing brief  periods  of  fright,  furnish  to  borrowers  in  any  com- 
munity all  the  capital  that  there  is  any  opportunity  to  put 
to  productive  use,  and  on  a  basis  that  is  safe.  In  periods 
of  great  prosperity,  when  capital  can  make  rates  of  profit 
above  G%  or  7% — that  is,  when  the  real  normal  rate  of 
interest  is  perhaps  !•%  or  10% — banks,  because  they  get 
deposits  freely  from  individuals  and  government,  make 
mountains  of  loans  at  6%  or  7%,  of  which  a  large  portion 
are  unsafe.  A  slight  scare  comes,  depositors  ask  for  their 
money.  The  banks  have  but  5%  to  10%  of  the  amount  of 
the  deposits  on  hand.  They  cannot  pay.  Then  the  banks 
storm  the  Federal  Treasury  for  deposits  of  public  funds,  or 
ask  permission  to  inflate  more. 

What  a  stupid  mistake  was  recently  made  by  the  offer 
of  $150,000,000  bonds  that  bank  currency  might  be  issued 
thereon.  There  was  no  scarcity  of  currency.  The  only 
trouble  was  that  the  bank  loans  had  been  too  many  times 
the  amount  of  the  actual  money  in  the  country.  They  owed 
too  much  to  depositors ;  but  these  loans  were  rapidly  re- 
duced. Banks  do  not  wish  to  extend  further  credits  in 
times  of  panic ;  rather  to  curtail  it.  And  individuals  do 
not  then  seek  to  make  new  loans,  but  only  to  renew  old  ones, 
to  protect  themselves  against  loss.  Were  all  the  gold  of  the 
world  dumped  into  our  own  banks  in  the  midst  of  a  panic 


BANKS  AND  PANICS  2^3 

it  would  not  promote  the  desire  either  to  lend  or  to  borrow. 
What  delays  recovery  from  a  panic  is  the  general  disinclina- 
tion of  men  to  borrow  and  begin  new  enterprises.  The 
banks  fill  up  with  money  and  no  one  seeks  it.  Loans  will 
go  begging  shortly,  but  these  bonds  will  go  on  drawing 
interest. 

The  attempt  to  cure  the  evils  of  inflation  with  further 
inflation,  is  as  though  the  Colonists  had  bribed  the  savages 
to  peace  with  rifles.  It  is  like  trying  to  put  out  a  fire  by 
pouring  on  gasoline.  If  this  policy  continues,  the  banks 
will  get  an  act  pledging  the  Government  to  redeem  their 
unlimited  issues,  as  well  as  guarantee  their  depositors,  and 
Government  and  all  will  go  down  together.  Why  not  learn 
that  ten  dollars  per  capita  is  just  as  good  as  $500.00  if  let 
alone,  and  not  juggled. 

But  the  big  bankers  use  the  currency  for  a  sponge  to 
soak  up  the  wealth  of  the  world  and  then  squeeze  it  into 
their  private  coffers.  The  "country  banks"  are  not  con- 
scious parties  to  this,  but  are  used  by  the  metropolitan 
banks.  What  more  right  has  a  bank  to  refuse  to  deliver 
my  money  to  me  on  demand  than  the  liveryman  to  refuse 
my  horse  because  it  is  a  holiday,  and  he  has  it  hired  out  at 
an  exorbitant  rate? 

The  total  fund  of  money  remains  of  the  same  total  value, 
notwithstanding  the  increase  or  decrease  of  its  volume  in 
number  of  dollars.  It  is  the  dollars,  the  iinifs  that  increase 
or  decrease  in  value.  Decrease  in  value  of  the  dollar  makes 
apparent,  but  not  real,  increase  in  value  of  all  other  prop- 
erty, for  it  increases  for  the  time  its  "dollar  price." 

To  think  that  increase  of  money  increases  wealth  is  as 
absurd  as  to  think  that  shortening  the  weight  arm  of  a  scale 
would  increase  the  thing  weighed.  It  would  certainly  in- 
crease the  apparent  weight.  If  we  shorten  the  arm  with- 
out increasing  the  size  of  the  "weights"  it  will  take  more 
"weights"  to  balance  the  thing  weighed.     Now,  what  sense 


274  RIGHT  AND  RICHES 

would  there  be  in  shortening  this  arm,  and  making  "pounds" 
smaller,  simply  to  be  able  to  say  that  we  have  more  pounds  of 
things?  But  if  some  special  "interest"  could  get  the  sole 
monopoly  of  making  the  weight  disks,  and  could  charge  a 
big  rental  for  their  use,  don't  you  suppose  this  "interest" 
should  try  to  get  a  law  to  shorten  the  scale  arm  so  they 
could  rent  out  more  disks,  just  as  the  banks  wish  to  reduce 
the  value  of  currency  so  people  must  rent  (borrow)  larger 
numbers  of  their  notes. 

Why  not  have  honest  weights  and  honest  measures  of 
value  ? 

High  interest  rates  do  not  indicate  insufficient  volume 
of  money.  The  financial  reviewers  tell  of  the  demand  of 
borrowers  exceeding  the  supply  or  quality  of  money  in 
existence.  Now,  borrowing  money  would  not  take  it  out 
of  existence,  would  not  remove  it  from  the  available  fund  of 
money,  for  in  actual  reality,  people  do  not  borrow  money, 
they  borrow  Credit  or  they  borrow  Capital — stock  and 
equipment. 

Would  any  one  be  so  foolish  as  to  borrow  money,  store 
it  away  and  pay  interest?  Perhaps  one  does  occasionally 
give  his  note  and  get  currency ;  but  most  often,  a  cheek 
which  he  seldom  cashes.  He  gets  Credit.  This  he  imme- 
diately converts  into  concrete  wealth,  not  credit  nor  money, 
but  capital,  or  concession.  Money  cannot  produce  an  out- 
put. Railroads,  horses,  machinery,  stocks  of  goods,  animals, 
contribute  an  output. 

One  says :  "I  have  a  thousand  dollars  capital,  'money  in 
the  bank.' "  What  does  he  mean  ?  Not  currency,  gold  or 
silver  coin,  or  greenbacks.  No  one  has  that  in  the  bank. 
He  has  $1,000.00  credit  at  the  bank. 

Credit  is  not  capital,  cannot  be  made  into  capital,  but  it 
is  commonly  so  called  because  one  may  readily  exchange  it 
for  real  capital.  But  we  must  be  definite.  We  are  now 
considering  the   volume  of  capital   in   the   community,   not 


BANKS  AND  PANICS  275 

what  it  is  possible  for  you  or  me  to  get.  Credit  will  get 
potatoes,  but  you  would  not  say  credit  is  potatoes.  Credit 
will  not  carry  cargoes  of  goods  across  the  sea.  It  requires 
ships  made  of  wood  or  steel.  Money  will  not  shelter  a 
stock  of  dry  goods  from  the  rain,  it  requires  a  store-room. 
Money  will  not  carry  a  railroad  train  over  a  river,  it  re- 
quires a  bridge.  It  will  not  print  newspapers ;  a  press  is 
necessary.  Ships,  buildings,  stocks  of  goods,  bridges, 
presses,  are  real  capital.  Money  is  not.  This  is  not  a  play 
on  words,  but  a  scientific  fact. 

What  some  industries  sufit'er  for,  even  on  the  crest  of  the 
wave  of  prosperity,  is  real  capital,  not  money.  Yet  some 
of  our  "eminent  financiers"  do  not  perceive  this.  Even 
the  great  Henry  George  became  confused  regarding  this. 

Let  us  trace  the  ordinary  case  of  a  man  starting  into  a 
business,  say  that  of  manufacturing.  He  has  $100,000 
"capital,"  according  to  the  loose  expressions  of  ordinary 
speech ;  that  is,  perhaps,  he  owns  some  farm  land,  some  flats 
in  the  city,  some  bank  stock,  a  few  shares  of  railroad  stock, 
some  real  estate  mortgages ;  perhaps  he  has  a  bank  balance 
of  $200.00.  He  decides  to  start  a  factory  and  contracts  for 
a  building  to  cost  $5,000.00.  He  has  but  $300.00  in  cash, 
yet  when  the  building  is  finished  he  pays  for  it  in  cash 
which  he  gets  just  the  day  he  needs  it  by  selling  some  mort- 
gages. Later,  his  machinery  is  delivered;  $5,000.00  more 
becomes  due;  this  he  gets  by  selling  some  railroad  stock, 
and  he  now  has  the  bulk  of  his  equipment.  Then  comes 
his  "stock"  of  materials  to  be  worked  upon.  Now  he  sells 
his  bank  shares  to  pay  for  it.  Later,  he  has  rents  come  in, 
sells  some  land,  etc.,  to  get  in  funds  to  take  up  the  increase 
of  "stock"  accruing  from  the  work  of  his  employes.  At  no 
time  has  he  had  money  for  capital.  For  brief  periods  and 
in  small  installments  money  or  credit  has  been  used  in  the 
exchange  incident  to  the  transfer  of  property — land,  credits, 
railroad  shares,  etc. — into  capital,   that   is,  into  stock  and 


276  RIGHT  AND  RICHES 

equipment.  But  at  no  time  has  he  held  a  volume  of  cur- 
rency out  of  circulation  by  his  operations.  This  common 
speech  which  says  "capital"  for  anything  which  may  be  ex- 
changed for  it  is  well  enough,  just  as  one  says  he  has  earned 
his  "bread"  wdien  he  means  the  resource  to  buy  bread  or 
other  subsistence  needs.  But  in  economics,  "capital"  is  first, 
last  and  all  the  time  limited  to  stock  and  equipment. 

Reviews  of  the  markets,  by  those  eminent  in  banking, 
and  manipulation  of  corporation  shares  and  bonds,  account 
for  a  "weak  market"  as  being  caused  by  production  exceed- 
ing the  proper  ratio  to  the  existing  fund  of  money — money 
being  limited  to  gold,  or  to  a  general  form  of  currency,  ac- 
cording to  the  school  to  which  the  reviewer  belongs.  Yet 
the  scientific  fact  is  that  neither  the  output  of  wealth  nor 
the  quantity  of  wealth  which  is  available  for  capital  is  in 
any  degree  limited  by  the  size  of  the  fund  of  currency. 
There  is  no  normal  ratio  or  relation  betiveen  the  two,  any 
more  than  between  such  output  and  the  number  of  horses 
in  use. 

In  order  to  be  definite  on  this  point,  I  must  risk  being 
tedious.  Capital  is  not  money,  is  not  derived  from  money; 
is  not  credit,  is  not  derived  from  credit.  A  reasonable  use 
of  credit  and  money  facilitate  the  application  of  wealth  to 
productive  purposes,  but  capital  may  be  thus  applied  with- 
out the  use  of  either  money  or  credit.  And  the  degree  in 
which  money  facilitates  such  application  is  not  in  proportion 
to  its  quantity;  more  especially  if  this  quantity  is  considered 
to  be  the  funds  of  gold.  Credence  expands  naturally  with  the 
success  of  production,  as  any  person  of  ordinary  observa- 
tion can  see.  If  one  succeeds  with  the  capital  you  lend  him, 
will  you  not  lend  him  more?  And  does  not  the  profit  he 
pays  you  increase  your  ability  to  supply  him  ?  But  you  will 
be  able  to  get  greater  interest  in  prosperous  times,  and  will 
demand  more  interest  while  he  will  naturally  seek  to  cancel 
his  debts. 


BANKS  AND  PANICS  377 

There  is  such  a  thing  as  an  extraordinary  demand  for 
capital.  Let  us  assume  that  it  may  at  times  exceed  all  pos- 
sibility of  immediate  supply.  This  comes  about  from  the 
unnatural  "ebb  and  flood"  of  business,  due  largely  to  our 
panic-breeding  system  of  finance,  to  the  fact  that  business 
starts,  runs  high  and  then  slumps.  When  business  im- 
proves, all  rush  at  once  to  enlarge  and  extend  equipment, 
making  the  demand  for  capital  abnormal.  Then  our  sys- 
tem floods  the  land  with  an  intoxicating  supply  of  bank 
credit. 

But  someone  may  ask,  if  you  have  money  or  credit  may 
you  not  exchange  it  for  capital?  Indeed,  but  that  is  not 
necessarily  increasing  the  existing  fund  of  capital  nor  de- 
creasing the  fund  of  money.  It  may  get  me  more  capital, 
but  it  may  do  so  by  taking  it  from  you.  What  is  needed  is 
to  have  the  available  fund  of  capital  enlarged.    How? 

By  such  inducements  as  will  cause  those  who  have  in- 
comes of  wealth  accruing  to  them,  from  rent,  interest,  divi- 
dends, etc.,  to  divert  them  from  their  enjoyment  fund  to 
their  investment  fund.  Higher  rates  of  interest,  and  greater 
assurance,  or  security  from  loss,  have  such  tendency  by  dis- 
couraging waste.  If  large  volumes  of  accruing  credit — 
power  to  claim  title  to  wealth — are  being  converted  into 
capital,  being  put  to  work  instead  of  being  "cashed"  and 
consumed,  this  maintains  or  increases  the  fund  of  capital. 
But  if  the  rich  credit-holders,  income-getters,  convert  their 
income  from  credit  into  luxuries:  if,  instead  of  buying  brick, 
steel,  cement,  machinery — stock  and  equipment — they  buy 
wasteful  personal  supplies  and  consume  them,  this  depletes 
the  "share"  and  "loan-carrying"  volume,  as  well  as  the 
"wealth  basis" — the  real  capital. 

A  railroad  does  not  need  more  money  when  in  the  inten- 
sity of  prosperity  it  struggles  to  sell  more  bonds.  It  needs 
more  cars,  rails,  bridges,  sidings,  etc.  Why  can't  it  provide 
these  things  from  its  increased  income,  one  naturally  asks. 


278  RIGHT  AND  RICHES 

That  it  should  be  able  to  is  unquestionable.  The  reason  it 
cannot  is  because  with  the  growth  of  prosperity,  the  con- 
trolling "interest"  in  its  affairs  manipulates  its  capitaliza- 
tion— increases  its  issue  of  stock  and  bonds,  without  adding 
to  its  real  capital. 

A  high  interest  rate  is  not  an  indication  of  a  scarcity  of 
money ;  rather  the  reverse.  Inflation,  over-supply  of  money 
tends  to  enhance  prices,  which  has  the  same  temporary  effect 
as  real  increase  of  wealth,  as  far  as  procuring  profits  to  make 
payments  of  interest  from  borrowers  to  lenders  is  effected. 
When  people  see  the  prices  of  things  advancing,  they  seek 
to  borrow  so  they  may  speculate  in  them.  Continued  pros- 
perity depends  on  the  following  relations  of  credit,  capital, 
money  and  property  in  general : 

First.  The  volume  of  credit  should  not  be  too  great  in 
proportion  to  the  volume  of  all  property. 

vSecond.  The  volume  of  capital  should  not  be  too  small 
in  proportion  to  all  other  property. 

Third.  The  volume  of  money  should  be  constant  in 
proportion  to  the  whole  volume  of  wealth,  for  this  is  essen- 
tial to  the  maintenance  of  money's  constant  value,  and  the 
consequent  steadiness  of  markets,  which  promotes  real  pro- 
duction. 

Fourth.  The  volume  of  money  need  have  no  relation  to 
the  number  or  volume  of  exchanges. 

Fifth.  The  volume  of  capital  is  entirely  independent  of 
the  volume  of  money. 

Sixth.  The  volume  of  capital  is  entirely  independent  of 
the  volume  of  credit. 

Seventh.  The  volume  of  currency,  other  than  money 
(checking  accounts,  drafts,  retirable  note  issues,  etc.)  should 
be  the  smallest  possible  proportion  (commensurate  with 
free  movements  of  exchange)  to  the  volume  of  unredeem- 
able, final  legal-tender,  debt-paying  money. 


BANKS  AND  PANICS  279 

Eighth.  The  volume  of  credit  should  not  become  too 
great  as  compared  to  the  volume  of  output ;  for  credit  com- 
monly draws  interest,  and  the  revenues  to  pay  this  interest, 
whether  obtained  from  rents,  dividends  or  enhancements  of 
value,  must  be  supplied  by  current  output. 

Ninth.  Debt  must  always  be  equal  in  volume  to  Credit. 
No  increase  of  one  is  possible  without  an  equal  increase  of 
the  other. 

The  foregoing  consideration  of  the  relations  of  Capital, 
Currency  and  Credit  to  prosperity  proves  conclusively  that 
prosperity  was  not  interrupted  by  the  scarcity  of  either  Cur- 
rency or  Credit. 

Let  us  now  consider  the  assertion  that  lack  of  Capital 
put  a  sudden  stop  to  that  wild,  strenuous  scramble  of  trade 
which  existed  a  few  months  ago, 

B— DEMAND  FOR  AND  SUPPLY  OF  CAPITAL. 

Docs  the  demand  for  capital  in  prosperous  times  tend  to 
increase  more  rapidly  than  the  output  of  wealth  from  which 
it  is  supplied? 

No. 

Notable  writers  have  attributed  the  present  alleged  short- 
age of  capital  to  the  destruction  of  capital  by  the  Boer,  the 
Spanish-American  and  Russo-Japanese  wars,  and  the  San 
Francisco  fire.  These  were  indeed  unfortunate  wastes  of 
capital,  great  losses  to  industry.  But  it  may  well  be  ques- 
tioned whether  these  wars  did  not,  along  with  such  waste, 
also  retard  business  to  such  extent  as  to  lessen  in  like  degree 
its  demand  for  capital.  This,  however,  will  not  hold  good 
regarding  the  San  Francisco  fire.  That  not  only  destroyed 
capital,  but  its  rebuilding  made  the  most  intense  demands 
for  it. 

Professor  Laughlin  says :  "The  scarcity  of  capital  is  the 
important  thing  in  the  situation."     But  in  the  course  of  his 
reasoning  he  does  not  really  have  in  view  the  scarcity  of  cap- 
is- 


280  RIGHT  AND  RICHES 

ital;  for  he  immediately  says :  "When  we  hear  it  said  that 
business  must  slow  up,  it  means  that  all  speculation  for  fu- 
ture values  must  azvait  the  grozvth  of  new  capital.  *  *  *  * 
The  undermining  of  confidence  in  some  of  our  large  indus- 
tries has  caused  very  serious  liquidation  in  securities." 

In  other  words,  speculative  increase  depends  on  output 
increase.  Loss  of  confidence  prevents  re-investment.  This 
does  not  mean  scarcity  of  capital,  but  luiwillingness  to  trust 
it  to  those  in  control  of  the  corporations  dominating  the 
field  of  opportunity. 

We  must  see  how  small  are  the  effects  of  all  these  wars 
and  disasters  on  remotely  subsequent  conditions,  when  we 
recognize  the  brevity  of  a  "generation"  of  capital,  for  cap- 
ital created  to-day  is  in  a  large  measure  consumed  in  to- 
morrow's industry. 

That  the  waste  or  loss  of  capital  at  one  period  would 
cause  it  to  be  scarce  several  years  later,  is  as  unlikely  as  that 
the  failure  of  a  potato  crop  would  make  seed  potatoes  scarce 
several  years  later,  and  that  the  extensive  use  of  capital 
would  make  it  scarce,  is  as  unlikely  as  to  think  that  the  ex- 
tensive growing  of  potatoes  for  a  period  of  years  should 
make  the  seed  scarce. 

Deprivation  of  the  peasant  class,  by  a  predatory  ruling 
class  through  oppressive  taxes  or  rents  in  Ireland  or  India, 
tends  to  make  a  dearth  of  seed  for  planting,  as  well  as  tools 
for  cultivation  of  crops.  The  continued  despoiling  of  crops 
by  wars  or  marauding  bands  will  likely  cause  a  small  plant- 
ing of  seed,  not  essentially  because  seeds  are  scarce,  but 
because  there  is  lack  of  assurance  of  reaping  the  fruit. 

The  important  fact  that  capital  is  mostly  supplied  by  the 
immediate  period  which  puts  it  to  use  must  not  be  over- 
looked. It  is  doubtful  if  it  would  greatly  tax  industry  to 
supply  in  three  years  a  volume  of  capital  equal  to  the  whole 
existing  supply,  should  a  demand  suddenly  arise  that  the 


BANKS  AND  PANICS  281 

world's  capital  be  doubled.  The  following  figures  are  an 
eloquent  proof  of  this : 

The  whole  total  capital  invested  in  manufacturing  in- 
dustries in  the  United  States,  according  to  the  census  for 
1900,  was  but  9,835  million  dollars,  yet  the  output  was  13,- 
014  million  dollars,  or  over  30%  more  than  the  capital. 

No  statistics  are  available  to  show  how  much  of  this 
pseudo  "capital"  of  9,800  million  dollars  consists  of  land  and 
franchise  values — concession — but  no  doubt,  if  we  placed  it 
at  half,  we  should  be  far  too  low.  On  this  basis  we  should 
have  in  round  numbers  5,000  million  dollars  of  real  capital 
employed  in  manufactures,  creating  an  output  of  13.000 
million  dollars,  or  more  than  two  and  one-half  times  the  cap- 
ital employed.  Now  to  do  this  requires  about  2,000  million 
dollars  for  wages  and  nearly  7,000  million  dollars  for  raw 
materials ;  but  this  9,000  million  dollars  does  not  deduct  from 
the  output,  but  is  still  an  effective  part  of  it.  A  large  part  of 
this  9,000  million  dollars  may  be  continued  as  capital  if  de- 
manded, as  the  price  of  this  raw  material  and  wages  earned 
can  be  reinvested  in  the  capital  fund  if  needed. 

Suppose  15%  of  this  output  were  put  to  extensions.  It 
would  much  more  than  double  the  capacity  in  three  years. 
No  doubt  the  railroads  and  mines,  if  true  figures  of  actual 
capital  were  available,  would  show  conditions  similar  to 
manufactures.  Agriculture  certainly  would  if  the  land  were 
eliminated  from  the  ''capital"  employed.  It  has  been  asserted 
by  one  who  has  given  the  subject  much  study  that  the  rail- 
road stock  is  95%  water.  But  industry  does  not  demand  on 
the  average  33  per  cent,  addition  of  equipment.  Ten  per 
cent,  would  be  tremendous  when  any  extensive  field  of  oper- 
ations is  included.  Perhaps  5%  would  be  nearer  the  most 
extreme  demands. 

From  a  product  more  than  double  the  whole  value  of  ex- 
isting capital,  there  would  then  be  demanded  but  2^%  of 
product  to  be  applied  as  capital  increase.     This  is  not  includ- 


282  RIGHT  AND  RICHES 

ing  the  capital  which  consists  of  stocks  of  goods  either  in 
process  of  completion  or  sale,  for  such  stocks  are  at  comple- 
tion the  output  itself  and  are  not  consumed  in  their  capital 
function,  but  flow  on  to  enjoyment  and  reproductive  uses. 

But  most  important  of  all  we  must  remember  that  ev- 
ery addition  to  capital  increases,  in  a  geometrical  ratio,  the 
output  of  wealth  available  for  capital.  Hence,  the  natural 
tendency  of  industry,  when  not  frustrated  by  adverse  inter- 
ference, is  to  furnish  for  the  added  demand  for  capital  a 
multiplied  supply.  Doubling  capital  is  likely  to  quadruple 
output. 

The  Hon.  Lyman  Gage,  after  recounting  losses  and  ex- 
tensive use  of  capital  in  the  construction  of  "railways,  elec- 
tric plants,  cotton  mills,  steamships,  etc.,  which  use  he  esti- 
mates at  5,000  millions  of  dollars  in  the  past  six  years,  says : 
"It  has  been  further  evident  to  thinking  persons  that  the 
pressure  for  the  use  of  capital  has  outmeasured  the  supply  of 
capital." 

Does  not  Mr.  Gage  obviously  forget  that  these  electric 
plants,  railways,  steamships,  etc.,  are  still  continuing  in 
themselves  to  be  the  most  intensely  effective  productive  cap- 
ital, and  that  they  are  giving  a  multiplied  output  of  wealth 
from  which  new  capital  may  be  constituted.  Yet  Mr.  Gage 
proposes  to  supply  this  presumed  shortage  of  capital  by  issue 
of  emergency  banknotes,  to  create  it  with  printing  presses. 

Even  if  it  were  a  fact  that  enlarging  industry  tends  to 
increase  the  consumption  of  capital  more  rapidly  than  it  in- 
creases the  output  of  wealth  from  which  it  is  supplied,  as 
these  professors  of  "high  finance"  allege,  then  how,  by  all 
that  is  logical,  do  they  expect  to  meet  this  excessive  demand 
with  the  printing  of  "paper  capital" — by  the  multiplication 
of  I.  O.  U.'s?  A  bank's  promise  to  pay,  whether  a  currency 
note  of  the  granting  of  a  checking  account,  is  not  an  addi- 
tion to  the  community's  supply  of  capital,  but  only  an  obli- 
gation on  the  part  of  the  bank  to  procure  capital  somewhere, 


BANKS  AND  PANICS  283 

somehow — a  mere  bet  by  the  bank  that  new  deposits  will 
meet  the  obligation. 

The  excess  of  such  obligations  is  indeed  the  sole  basis  of 
panics.  Banks  do  not,  in  the  very  nature  of  their  business 
cannot,  limit  loans  to  what  they  have  got,  but  make  them 
mostly  with  what  they  expect  to  get. 

Wealth  must  first  he  produced  in  concrete  form  and 
turned  into  the  fund  of  wealth  in  return  for  credit.  It  is 
then  withdrawn  for  enjoyment  and  for  capital  in  specific 
form,  and  this  credit  canceled.  No  increase  of  wealth  can 
be  made  but  by  growing,  manufacturing,  mining,  etc. — by 
output.  No  increase  or  replenishing  of  capital  is  possible 
but  by  someone  deferring  use  of  some  of  this  real  output 
wealth  and  devoting  it  to  capital.  The  real  trouble  crops 
out  as  we  further  read  Mr.  Gage's  article  in  Everybody's 
Magazine. 

"Syndicates  privately  formed,"  he  says,  "who  had  taken 
blocks  of  securities  in  expectation  of  selling  them  to  the  pub- 
lic, found  that  there  was  no  public  that  would  or  could  buy 
them." 

The  undeniable  fact  is  that  these  "Syndicates  privately 
formed"  are  the  "milk  in  the  cocoanut."  They  have  been, 
like  vampires,  for  many  years,  sucking  the  substance  of  the 
people,  as  well  as  the  corporations  they  control,  by  taking 
blocks  of  securities  at  a  few  cents  on  the  dollar  and  selling 
them  to  the  public  by  their  "washing"  schemes  at  close  to 
par. 

But  the  public  has  come  to  know  more  of  these  "syndi- 
cates privately  formed"  than  they  did  formerly.  With  this 
knowledge  the  public  has  also  become  fearful  of  their  cor- 
porations and  afraid  of  the  banks  they  manipulate. 

Mr.  Gage  says  further :  "Under  these  unusual  induce- 
ments *  *  *  *  banks  took  over  hundreds  of  millions  of  se- 
curities of  these  corporations ;  thus  the  delicacy  of  the  situa- 
tion was  greatly  aggravated." 


284  RIGHT  AND  RICHES 

And  does  not  Mr.  Gage  suppose  that  with  legislation  en- 
abling banks  to  deposit  the  securities  of  these  very  same  cor- 
porations as  security  for  additional  issues  of  notes — "emer- 
gency currency" — that  they  would  under  the  same  "unusual 
inducements"  load  up  with  double  the  former  amount  of 
these  securities? 

It  is  wonderful  what  a  lot  of  information  there  is  "be- 
tween the  lines"  of  Mr.  Gage's  article. 

C— DILATION  OF  CONCESSION  VALUE. 

All  forms  of  productions  would  become  progressively 
cheaper — easier  of  procurement — with  the  extended  use  of 
capital — increased  equipment — and  improved  methods,  were 
it  not  for  the  repressive  power  given  by  Concession  to  take 
an  increasing  share  of  output  without  giving  any  help. 

It  is  contrary  to  nature  for  prices  to  advance  with  pros- 
perity, as  has  been  the  case  the  past  few  years.  The  natural 
tendency  of  prosperity  is  to  reduce  the  price  (the  real  ease- 
of-acquirement  "price,"  not  essentially  to  change  the  money 
price)  of  all  productions  because  of  their  more  bountiful 
output  with  more  plentiful  capital.  Food,  clothing,  houses, 
ships,  railroads,  highways,  etc.,  should  become  increasingly 
available  to  all.  The  natural  tendency  is  to  maintain  a  nor- 
mal interest  rate,  higher,  much  higher  than  the  interest 
rate  of  hard  times  (not  the  premium  paid  to  get  renewals  of 
loans),  but  not  tending  to  increase  progressively  with  the 
multiplying  productiveness  of  capital. 

We  must  remember  first  that  interest  "rate"  is  a  percent- 
age and  not  a  stated  quantity.  As  prosperity  advances,  the 
natural  tendency  is  for  the  owners  of  capital  in  an  industry 
to  receive  a  constantly  increasing  volume  of  goods,  more 
tons  of  steel,  more  barrels  of  cement,  etc.,  but  of  less  value 
when  measured  by  human  endurance. 

To  illustrate :  Suppose  one  invests  a  hundred  tons  of 
pig  iron,  when  it  is  worth  $20.     By  immense  production  its 


BANKS  AND  PANICS  285 

value  is  reduced  in  ten  years  to  $10  per  ton,  but  whereas 
the  first  year  he  got  as  net  increase  6  tons,  he  now  gets  13 
tons.  His  12  tons  reinvested  has  now  a  productive  power 
in  tons  greater  than  12  tons  of  ten  years  ago,  but  has  no 
more  value  as  measured  in  human  endurance  than  6  tons 
had  then.  This  illustration  of  course  does  not  apply  to  the 
ten  year  period  just  past,  but  would  apply  where  the  natural 
laws  of  industry  were  not  frustrated. 

What  is  the  natural  basis  of  the  interest  rate  of  capital? 
This  is  the  important  point  for  us  to  grasp. 

It  is  the  percentage  of  increase  which  will,  on  the  aver- 
age, induce  owners  to  defer  the  personal-enjoyment-con- 
sumption of  wealth,  and  devote  it  to  capital.  Obviously, 
users  of  capital  cannot  pay  more  than  its  reproductive  in- 
crease. 

Suppose  such  user  borrow  capital  in  the  form  of  cattle 
to  feed  on  the  free  lange.  He  certainly  may  not  pay  the 
furnisher  of  it  as  interest,  more  than  the  annual  increase 
of  the  herd,  but  he  may  pay  much  less.  Or  again,  we  will 
assume  that  he  has  not  free  range.  He  must  then  first  take 
from  the  herd's  increase  rent  for  this  pasture,  after  which 
he  must  take  any  interest  charges  from  the  balance  of  the 
increase.  Or  if  he  owe  no  one  for  his  capital  he  must  still 
first  deduct  the  rent  from  the  increase,  then  the  rest  of  the 
increase  will  constitute  wages  for  the  labor  occasioned  and 
interest  on  the  value  of  the  capital. 

Furnishers  of  capital  in  all  lines  must  ever  divide  the 
increase  with  Concession  by  paying  accessage  or  rent  either 
directly  or  indirectly. 

Herein,  then,  is  the  vital  point! 

Concession  invariably  takes  as  large  a  share  as  owners 
will  tolerate.  When  two  hundred  dollars'  worth  of  oranges 
(above  cost  of  care)  grow  on  an  acre  of  trees,  which  have 
taken  perhaps  $100  of  capital  to  plant  and  grow  to  bearing 
size,  what  is  the  result?     Is  this  two  hundred  per  cent,  in- 


286  RIGHT  AND  RICHES 

terestf  Not  by  any  means.  The  concession  value  in  the  orange 
grove  is  dilated.  This  new  term  seems  needful,  as  "capital- 
ized" entirely  obscures  the  real  meaning  sought  to  be  ex- 
pressed. The  land  gees  to  $1,900  or  $2,500  per  acre.  This 
$200  net  crop  is  mostly  rent,  accessage,  which  this  dilated 
concession  power  demands. 

Now,  let  us  notice  the  corporate  working  of  dilation  for 
corporate  issues  are  more  vitally  responsible  for  panics.  We 
may  have  seemed  to  digress,  almost  to  have  forgotten  our 
text,  "Panics,"  but  not  so. 

Webster  defines  "dilatation"  or  "dilation" :  The  expand- 
ing of  anything  into  greater  bulk  by  its  own  elastic  power. 

We  hear,  and  we  see  in  the  press  much  about  the  "water- 
ing" of  stock.  If  this  expression  "watering"  has  any  defin- 
ite meaning,  I  take  it  to  be  the  increase  of  a  corporation's 
securities  to  an  amount  in  excess  of  the  market  or  exchange- 
value  of  its  assets,  or  perhaps  in  excess  of  their  profit-paying, 
value  or  ability.  But  the  term  "watering"  is  also  confusing- 
ly used  to  indicate  the  swelling  or  increase  of  capitalization 
to  cover  an  actual  increased  value  or  profit-paying  power 
in  franchises  or  other  concessions  owned  by  such  company 
(such  increase  perhaps  being  in  consequence  of  progressive 
conditions  in  the  community  giving  more  patronage  or  from 
some  power  to  charge  higher  rates). 

The  word  "dilation"  expresses  this  meaning,  that  is,  the 
swelling,  expansion  or  distension  of  concession  value  which 
will  actually  pay  dividends  on  more  stock  or  interest  on  more 
bonds. 

What  is  the  common  history  of  corporate  issues,  from  the 
beginning  of  the  recovery  from  one  panic  until  the  crest  of 
the  inflation  wave  is  reached,  and  explosion  precipitates  an- 
other? Take  as  an  example  a  corporation  manufacturing 
a  staple  commodity  such  as  iron,  owning  beds  of  ores,  etc., 
or  one  operating  railroads,  or  gas  plants,  having  franchises, 
or  mines  of  coal  or  minerals  depending  on  ore  lands.     Sup- 


BANKS  AND  PANICS  287 

posing  such  corporation  to  be  "capitalized"  at  a  reasonable 
cost  of  its  "plant" — tangible  equipment  and  stock  on  hand. 
As  prosperity  increases  income,  does  the  percentage  of  divi- 
dends increase  correspondingly?  No.  Is  the  difference 
applied  to  extensions  and  enlargement  of  plant?  No,  not 
commonly.  Plainly  the  property  of  the  company  is  worth 
more  when  it  is  bringing  in  a  larger  income.  Then  what  is 
done  with  this  increased  value  which  grows  with  geometrical 
ratio?  Certainly  we  have  not  recently  seen  the  increased 
output  reduced  in  price. 

We  might  then  expect  that  each  share  of  stock  would 
pay  multiplying  dividends,  6%,  then  10%,  then  15,  20  and 
30% ;  that  these  corporations,  able  to  use  capital  with  such 
great  increase,  would  double  their  capital  stock  and  offer 
the  public  the  new  shares,  paying  these  wonderful  dividends. 
Either  that  or  cut  prices  to  consumers  on  their  output.  But 
they  do  neither.  As  the  concession's  value  dilates  they  in- 
crease their  stock  and  bonds.  They  issue  a  large  quantity 
of  bonds  bearing  only  a  stingy  4  or  5%,  and  sell  them  to  the 
public  in  exchange  for  real  capital  to  make  extensions.  But 
why  do  not  the  "public"  investors  start  plants  of  their  own 
and  make  30%  instead  of  buying  these  low-rate  bonds  ?  Be- 
cause the  established  corporations  have  the  field,  own  the 
concessions.  But  do  they  pay  their  old  original  stockholders 
30  or  40  per  cent  ?  In  effect,  yes — if  the  management  does 
not  take  advantage  of  their  position  to  scoop  up  this  profit, 
which  is  common.  But  they  seldom  pay  a  larger  percentage 
in  form,  for  they  double,  treble,  or  quadruple  the  stock  issue, 
and  turn  the  new  shares  over  pro  rata  to  old  shareholders 
as  a  "share  dividend,"  commonly  called  "cutting  a  water- 
melon." In  other  words,  the  original  holder  of  100  shares 
is  presented  at  various  periods  with  50  or  100  new  shares, 
so  that  while  he  gets  but  5  or  6%.  on  each  share  he  gets  it  on 
two,  three  or  four  shares  instead  of  one.    Or  perhaps  in  ad- 


288  RIGHT  AND  RICHES 

dition  to  doubling  the  stock   the  bonded  debt  is   doubled, 
trebled  or  quadrupled. 

Thus  the  dilating  concession  value  is  "capitalized"  or 
more  properly  speaking,  "securitized."  Thus  the  public  is 
made  to  furnish  the  real  capital  at  5%,  while  those  on  the 
ground  floor,  the  concession  holders,  get  20,  30  or  40%.  It 
is  quite  common,  however,  for  the  clique  in  control  of  "syn- 
dicates privately  formed,"  to  defraud  even  the  masses  of  the 
original  stockholders  by  concealing  the  true  profit  earnings 
from  them.  In  this  case  they  take  these  new  issues  them- 
selves at  a  fraction  of  their  face,  and  then,  by  disclosing 
the  true  profits  or  by  exaggerating  them  and  showing  the 
wonderful  growth  to  come  and  by  "washing"  the  issues  on 
'change  until  the  public  is  led  to  expect  still  further  enor- 
mous growth  of  profits,  this  controlling  clique  gets  from 
the  public  perhaps  double  what  the  treasury  of  the  company 
got  for  the  new  issues  of  stocks  or  bonds.  The  public  will 
often  buy  on  a  present  basis  of  2  or  3%  present  interest  or 
dividends,  if  the  promises  of  growth  are  rosy  enough. 

Mr.  Stuyvesant  Fish,  in  his  article  some  months  ago  in 
the  public  press,  displays  an  ignorance  of  economic  science, 
for  he  says :  "Despite  the  unprecedented  output  of  gold, 
money  is  dear ;  and  dear  because  of  high  prices  and  activity 
in  trade."  I  have  shown  the  reader  that  "dear  money"  is 
evidenced  by  /ow  prices,  and  that  high  prices  for  the  whole 
circle  of  things  are  a  mathematical  impossibility,  and  are 
simply  the  manifestation  of  cheap  money  caused  by  exces- 
sive supply.  He,  however,  proceeds  to  cite  the  loss  of 
"money"  in  the  Boer  and  Russo-Japanese  Wars.  Yet  there 
is  no  history  of  any  loss  of  money  in  these  wars.  Mr.  Fish 
surely  means  wealth  and  not  money. 

The  high  wages  he  mentions  are  a  further  evidence  of 
cheap  money.  But  liowever  untrained  in  the  study  of  eco- 
nomics from  society's  standpoint,  Mr.  Fish  is  "up"  on  the 
practices  of  corporate  manipulation.    He  says : 


BANKS  AND  PANICS  289 

"Wall  Street  has  absorbed  and  is  absorbing  more  than  its 
share  of  the  loanable  fund.  While  banks  outside  of  New  York 
are  lending  more  freely  than  usual  at  this  season,  yet  that 
which  they  lend  is  instantly  and  persistently  absorbed  by 
Wall  street.  The  New  York  Stock  Exchange  has  ceased  to  be 
a  free  market  where  buyers  and  sellers  fix  prices  through 
demand  and  supply,  and  has  become  the  plaything  of  a  few 
managers  of  cliques  and  pools.  The  investing  public  is  out 
of  the  market  *  *  *  *  simply  because  of  distrust 
*  *  *  *  of  the  methods  of  corporate  finance  now  in  vogue  in 
Wall  Street.  Indeed  it  seems  to  me  that  we  are  already  em- 
barked on  a  long-needed  Moral  Financial  Reformation,  which 
like  the  Religious  Reformation  of  the  middle  ages,  will  through 
much  cruelty,  work  out  good  in  the  end.  To  the  need  of  such 
a  reformation  the  public  is  fully  awake." 

Let  us  hope  so,  Mr.  Fish. 

The  watering  of  corporate  securities,  however,  serves 
another  very  important  purpose,  viz. :  When  the  pubHc 
clamors  for  reduced  rates  these  corporation  managers  point 
to  the  "enormous  'capital  invested'  and  the  low  percentage  of 
dividend  paid,"  as  an  excuse  for  not  giving  the  naturally  re- 
duced prices  and  rates  which  prosperity  should  naturally 
make  available  to  patrons.  This  is  how  the  public  is  kept 
from  reduced  rates  and  how  the  honest  investors  of  real  cap- 
ital are  prevented  from  participating  in  the  constantly  in- 
creasing interest  rate  which  a  multiplying  output  without 
reduction  of  prices  should  give. 

A  judge  recently  declared  the  law,  reducing  the  price  of 
gas  in  New  York  City  from  the  exorbitant  price  of  eighty 
cents  to  be  unconstitutional,  because  that  even  though  the 
securities  of  the  company  had  been  "watered"  to  cover  the 
dilation  of  franchise  value,  yet  there  were  innocent  stock- 
holders. Pray,  why  are  a  few  "innocent  stockholders'  "  in- 
terests so  much  more  sacred  than  the  multitude  of  citizens' 
interests  ? 


290  RIGHT  AND  RICHES 

D— THE  PART  THE  BANKS  PLAY. 

It  is  not  herein  claimed  that  concession  values  would  not 
be  ultimately  increased  without  the  help  of  banks,  nor  that 
depression  of  industry  would  not  ultimately  result  from  the 
increasing  exactions  thereof.  Depression  is  sure  to  result 
from  lessening  the  Rezvard  of  Production  by  the  demands  of 
increased  accessage.  But  we  are  at  present  considering 
only  increase  of  debt  and  its  culmination  in  fright  and  panic. 

Banks  promote  this  dangerous  incubus  of  debt  and  there- 
by help  to  bring  on  the  crisis  in  the  stock  market. 

This  is  the  part  the  banks  play. 

Nature  is  hard  to  circumvent.  With  increased  produc- 
tion and  prosperity  it  is  impossible  for  any  special  interest 
to  get  all  the  profit.  Some  of  it  must  be  diffused  in  spite  of 
the  most  ingenious  scheming.  This  diffusing  of  prosperity, 
although  it  only  reaches  the  average  public  in  a  fraction  of 
the  degree  it  should,  does,  however,  raise  the  percentage 
that  the  public's  capital  will  earn  locally,  from  4  or  5% 
up  to  6,  7  or  8%.  The  great  corporations  continue  to  place 
large  volumes  of  bonds  bearing  but  -i  or  5%  on  the  market, 
together  with  stocks  which  are  then  earning  no  higher  rates. 

The  public,  by  reason  of  the  measure  of  prosperity  exist- 
ing generally  among  the  people,  that  has  escaped  the  schem- 
ers, is  able  to  get  a  greater  rate  of  revenue  from  various 
local  investments,  hence  does  not  absorb  these  corporate 
issues  so  readily. 

The  banks  magnify  this  apparent  increased  rate  of  profit 
from  private  investments  as  well  as  corporate  issues ;  for,  by 
increased  issues  of  their  notes  and  by  the  extension  of  check- 
ing accounts  to  depositors  of  personal  notes  for  loans,  they 
progressively  expand  the  volume  of  currency,  thus  decreas- 
ing its  "unit-value"  and  inversely  increasing  the  apparent 
or  money  value  of  all  other  classes  of  property,  thus  causing 
unhealthy  speculation. 


BANKS  AND  PANICS  291 

These  bank  loans  amounted  in  1902  to  more  than  6,600 
milHon  dollars  or  three  times  the  total  money  in  the  coun- 
try and  more  than  nine  times  the  money  in  the  possession 
of  all  the  banks.  By  November,  1907,  these  loans  had  in- 
creased about  25%,  or  to  about  7,500  million  dollars.  Think 
of  it,  a  volume  of  debt  giving  no  return  to  the  public  which 
was  equal  to  more  than  three-fourths  of  the  manufacturing 
capital  of  the  land.    Who  pays  the  interest  on  this  debt  ? 

What  do  we  need  of  this  vast  fund  of  fictitious  wealth? 
This  is  the  principal  source  of  inflation  which  breeds  panics. 
This  is  the  booster  of  fictitious  values ;  for  all  these  loans, 
consisting  of  accounts  subject  to  check,  are  performing  the 
currency  function  of  money.  The  apparent  increase  of 
values  thus  caused  enables  dealers  in  lands,  lots,  and  even 
real  wealth  to  reap  actual  profits.  (But  they  are  exceeded 
by  the  losses  of  holders  when  the  slump  comes.)  These 
profits  merge  with  true  interest  into  the  revenues  of  in- 
vestors, thus  further  raising  the  current  interest  rate. 

This  advance  of  the  current  interest  rate  reflects  again 
on  the  stock  market  with  depressing  effect.  For  the  already 
great  issues  of  big  corporation's  bonds  must  now  sell  cheaper 
to  give  buyers  this  higher  rate.  These  concerns  then  need  in- 
creased supplies  of  real  capital,  cars,  engines,  machinery,  etc., 
to  meet  the  demands  of  generally  increased  industry.  To 
meet  this  need  they  offer  bonds  and  short  time  notes  bearing 
somewhat  higher  rates  of  revenue.  These  join  with  more 
widespread  increased  current  rates  in  diverting  investment 
from  old  issues  on  the  market. 

The  interest  rate  which  people  generally  are  able  to  make 
in  business  and  land  speculation  grows  to  say  7%.  Now,  in 
order  for  a  5%  bond  to  make  a  7%  return  it  must  be  bought 
at  about  70  cents  on  the  dollar.  So  that  when  the  general 
rate  of  interest  among  the  public  grows  to  8%,  these  bonds 
to  pay  8%,  so  the  public  can  afford  to  buy  them,  must  be  sold 
at  about  60  cents  on  the  dollar. 


292  RIGHT  AND  RICHES 

Additional  issues  cannot  be  put  on  the  market  in  compe- 
tition. Some  corporations  must  have  new  capital.  Some 
railroads  must  have  new  cars.  etc.  What  do  they  do?  They 
turn  to  the  banks,  for  the  big  stock-jobbers  also  dominate 
the  "Central"  banks.  The  banks  furnish  the  funds  for  a 
while  at  the  old  rate. 

This  is  the  beginning  of  the  end. 

But  why  can  the  banks  furnish  funds  at  a  rate  below 
what  the  general  public  can  afiford  ?  The  answer  is  furnished 
by  a  study  of  our  banking  laws. 

E— BANKING  LAWS. 

No  better  example  is  needed  of  the  danger  to  the  public 
in  trusting  an  interested  class  to  dominate  legislation,  than 
is  furnished  by  the  laws  passed  at  the  dictation  of  the  banks. 

When  "free  silver"  was  proposed  these  bankers  were  loud 
in  their  assertions  that  property  could  not  "be  created  by 
law."  Yet  when  their  class  selfishness  seems  to  demand  it, 
they  expect  government  to  reverse  one  of  the  basic  laws  of 
nature  and  commerce — to  create  capital  out  of  paper. 

If  Congress  should  hold  a  conference  with  the  "Consoli- 
dated Counterfeiters'  Association"  or  "The  United  Smug- 
glers' Union"  and  amend  the  laws  to  suit  them,  it  would 
seem  past  belief.  Yet  when  the  country  is  threatened  by  these 
wholesale  embezzlers,  the  head  manipulators  of  banks,  they 
are  invited  and  asked  what  further  favors  they  should  like.- 

This  is  not  insinuating  that  bankers  generally  are  crim- 
inals, though  it  might  truly  be  stated  that  the  procuring  of 
some  of  our  financial  laws  are  among  the  worst  of  crimes ; 
for  they  are  planned  particularly  and  specifically  to  support 
the  stock-jobbing  dens  of  thieving,  chief  of  which  is  Wall 
Street. 

Let  us  briefly  summarize  the  National  Bank  Act  which 
in  so  far  as  may  be  State  bank  laws  are  patterned  after.  The 
salient  feature  of  this  act  is  the  section  regarding  reserves. 


BANKS  AND  PANICS  293 

At  the  start  the  more  honest  and  intelHgent  members  of 
Congress  recognized  the  need  that  banks  carry  a  decent 
amount  of  reserve.  They  thought  that  a  bank  should  at  all 
times  hold  in  its  vaults  at  least  one  dollar  for  every  four 
dollars  it  owed  its  depositors.  This  need  would  be  apparent 
to  one  of  "ordinary"  intelligence.  But  those  masters  of  the 
art  of  "making  something  out  of  nothing"  thought  not. 
Finally  they  beat  the  amount  down  by  this  masterpiece  of 
scheming  for  the  interest  of  Wall  Street. 

This  brilliant  plan  classified  National  banks  or  banking 
cities  into  three  classes,  with  special  privileges  to  those  cities 
in  certain  classes,  an  action  which  had  it  been  of  popular 
benefit  would  have  been  enjoined  and  declared  unconstitu- 
tional, as  discriminating  between   States. 

Now  notice  the  fine  planning. 

The  banks  of  New  York  City  alone  constituted  the  first 
class,  known  as  ''Central  Reserve  Banks;"  those  of  sixteen 
other  cities,*  the  second  class,  called  "Reserve  City  Banks," 
and  all  other  banks  the  third  class,  commonly  called  "Coun- 
try Banks."  The  banks  of  the  first  and  second  classes  were 
to  hold  25%  reserve,  but  the  third  class  need  keep  only  15%. 

Now  here  comes  the  Wall  Street  clause.  Instead  of  these 
banks  each  holding  its  reserve  in  its  vaults  so  it  would 
have  it  when  demanded,  it  was  provided  that  the  third 
class  banks  could  loan  three-fifths  of  their  reserves  (leaving 
in  their  vaults  but  6%)  to  the  banks  of  the  First  and  Second 
classes.  The  Reserve  City  Banks  in  turn  may  deposit  half 
of  their  reserve  in  the  Central  Reserve,  that  is,  in  New  York 
banks. 

Now,  suppose  such  deposits  of  Country  Banks  increased 
the  total  deposits  of  the  Reserve  City  Bank,  say  in  Phila- 


*St.  Louis  and  Chicago  were  later  added  to  the  Central 
Reserve  cities,  and  other  cities  were  added  to  the  second  class 
but  without  practical  efifect. 


294  RIGHT  AND  RICHES 

delphia,  one-third,  or  from  $1,500,000  to  $2,000,000.  The 
Philadelphia  bank's  reserve  would  now  be  $500,000,  or  no 
more  than  the  amount  of  the  country  bank  deposit,  and  yet 
it  may  deposit  half  of  this  in  New  York  banks.  But  the 
Country  Banks  may,  and  mostly  do,  send  their  reserves  di- 
rectly to  New  York.  This  is  exactly  as  though  two  men 
should  trade  $1,000  checks  and  then  say  they  each  had 
$1,000  more  cash. 

There  is  a  lack  of  sincerity  with  regard  to  these  banking 
matters  on  the  part  of  the  banks  and  public  officials. 

Scrutinize  the  statement  of  a  bank  when  it  does  purport 
to  give  one  to  the  public,  and  you  will  see  under  the  head  of 
"Cash"  assets  an  item  termed,  "due  from  other  banks  and 
the  U.  S.  Treasurer"  amounting  perhaps  to  something  like 
half  of  the  cash  they  purport  to  have  on  hand.  Yet  you  see 
no  corresponding  deduction  for  "cash  that  they  owe  other 
banks  and  the  U.  S.  Treasurer."  That  is  counted  under  the 
general  head  of  deposits. 

Further  these  banks  while  earning  10  to  12%  on  their 
capital  and  surplus  (the  National  Banks  earned  10.98%  in 
1902),  pose  as  philanthropic  institutions.  When  they  loan 
you  their  credit  at  6  or  7%  they  are  "accommodating"  you. 
But  when  you  expect  them  to  return  the  gold  you  deposited 
with  them,  you  are  "unpatriotic." 

An  ex-Secretary  of  the  Treasury,  writing  m  a  great 
Encyclopedia,  says:  "These  National  Banks  have  since 
their  establishment  received  more  than  $4,000,000,000  of  the 
Government's  money  and  cared  for  if,  thus  doing  the  Gov- 
ernment a  great  service.  "A  great  service"  indeed,  to  have 
four  billion  dollars  without  interest  at  critical  times,  when 
call  money  is  perhaps  at  50%.  It  is  a  singular  thing  how 
many  men  connected  with  the  U.  S.  Treasury  graduate  into 
bank  officials.     Can  it  be  a  compensation? 

When  a  bank  fails,  entailing  great  loss  and  confusion 
and  its  officers  are  orosecuted  criminally,  they  often  deserve 


BANKS  AND  PANICS  295 

sympathy.  The  bankinj;^  laws  are  more  criminal  than  such 
officers  usually  are.  To  allow  banks  to  lend  all  but  6%  of 
their  deposits,  and  then  prosecute  the  officers  for  receiving 
deposits  after  the  bank  is  insolvent,  is  like  allowing  a  child 
to  play  with  great  sums  of  coin  and  bills,  and  then  beating  it 
cruelly  when  some  of  it  is  lost. 

Now  there  could  have  been  but  one  purpose  for  this  re- 
serve scheme:  It  was  to  put  the  great  bulk  of  the  money 
of  the  country  within  reach  of  the  Wall  Street  Manipulators, 
and  they  were  not  disappointed  in  the  least  with  its  practical 
workings.  Mind  you,  this  is  real  money  that  is  thus  gath- 
ered to  the  great  stock  gambling  center,  not  just  credit. 

In  the  recent  panic  this  banking  crowd  deliberately  and 
persistently  circulated  the  report  that  the  cause  of  the  panic 
was  the  withdrawal  of  their  money  from  the  banks  by  the 
people. 

.  Yet  what  is  the  truth  of  the  matter?  (There  are  as  yet 
no  statistics  available  regarding  the  condition  of  the  banks 
of  the  country,  other  than  National,  but  there  is  no  reason 
to  suppose  that  withdrawals  from  them  would  be  greater 
than  from  the  National  banks.) 

Circular  No.  56,  issued  by  the  United  States  Comptroller 
of  Currency  on  December  23,  1907,  and  giving  the  condition 
of  National  Banks  on  December  3,  1907,  is  full  of  interest- 
ing information.  Amazing  as  it  may  be,  it  shows  that  the 
National  Banks  of  the  whole  country  actually  held  in  their 
vaults  oh  December  3,  1907,  26  million  dollars  more  actual 
money  than  on  November  12,  1906.  How  can  such  an  out- 
rageous falsehood,  as  that  hoarding  made  the  trouble,  be 
promulgated  in  the  face  of  this  statement  ? 

But  where  was  all  this  money,  that  the  banks  of  the  coun- 
try could  not  meet  their  demands  with  it?  Largely  loaned 
on  Wall  Street.  As  we  have  outlined  above,  all  National 
banks  are  supposed  to  maintain  a  sacred  fund  of  15%  or 
26%,  according  to  their  class,  to  meet  any  unusual  demands 

19- 


296  RIGHT  AND  RICHES 

of  depositors.  There  lias  not  been  shown  any  extraordinary 
demand  over  the  country  in  general  at  the  beginning  of  the 
panic,  but  just  the  normal  demands  of  a  thriving  business 
situation.  Yet  the  banks  were  entirely  unable  to  meet  it, 
and  turned  their  depositors  away  with  various  make-shifts, 
such  as  cashiers'  checks,  and  what  was  euphoniously  termed 
scrip,  but  was  nothing  more  nor  less  than  counterfeit  money 
issued  on  a  gigantic  scale. 

I  repeat,  where  was  this  great  volume  of  money  which 
was  in  the  banks,  a  sum  even  in  excess  of  a  year  previous? 
The  answer  is  given  in  the  said  circular,  and  is  the  key  that 
unlocks  the  whole  secret  of  the  cause  of  this  and  previous 
panics. 

This  is  where  the  money  was :  More  than  200  million 
dollars  of  this  sacred  fund  had  been  received  by  the  New 
York  banks  as  reserve  agents,  as  a  sacred  trust  to  be  re- 
turned instantly  upon  demand.  This  statement  shows  that 
all  the  National  Banks  of  the  whole  country  together  held 
on  December  3,  1907,  a  total  sum  of  but  660  million  dollars 
in  real  money.  Yet  the  trouble  was  not  that  the  banks  had 
too  little  money,  but  that  they  owed  too  much  to  depositors. 

These  banks,  with  this  660  million  dollars  of  actual 
money,  had  built  up.  upon  it,  liabilities  to  the  total  of  8,407 
million  dollars,  or  about  thirteen  times  the  amount  of  their 
cash.  And  a  further  study  of  this  statement  shows  that 
the  most  outrageous  excess  of  liabilities  to  cash  was  found 
in  the  banks  of  New  York  City. 

These  forty  banks  of  New  York  City  had  received  from 
the  outside  banks,  and  still  owed  them  on  December  3,  of  this 
vital  reserve  fund,  on  which  solvency  of  the  outside  banks 
depended,  with  the  promise  to  make  instant  return  of  it  upon 
demand,  the  enormous  sum  of  more  than  200  million  dol- 
lars, which,  as  can  be  seen,  is  about  one-third  of  the  total 
money  held  by  all  the  National  Banks. 


BANKS  AND  PANICS  297 

And  how  much  money  did  these  New  York  City  banks 
have  to  meet  this  sacred  demand  ?  The  circular  shows  that 
on  December  3,  1907,  they  had  but  176  milHon  dollars  all 
told,  to  meet  liabilities  of  every  description.  Yet  in  addi- 
tion to  this  reserve  money  which  the  country  banks  were 
supposed  to  be  able  to  get  upon  call  for  it,  these  New  York 
City  banks  owed  their  individual  depositors  the  staggering 
sum  of  586  million  dollars. 

But  it  may  also  be  said  that  the  individual  depositors 
also  owed  them,  approximately,  the  same  amount  and  that 
this  would  to  some  extent,  be  a  set-off.  This  is  somewhat 
true,  as  the  theory  of  banking  is  built  up  upon  the  assump- 
tion that  only  about  20%  of  what  a  bank  owes  depositors 
needs  to  be  kept  actually  on  hand,  to  meet  emergencies.  But 
this  20%  would  be  about  120  million  dollars,  or  two-thirds 
of  all  the  cash  they  had  on  hand. 

Still  this  is  not  all.  They  owed  the  United  States  Treas- 
ury 76  million  dollars,  or  nearly  half  of  the  cash  that  they 
had.  There  was  no  offset  to  this.  And  they  owed  State 
and  private  banks  and  trust  companies  the  immense  sum  of 
195  million  dollars,  and  they  had  due  them  from  these  in- 
stitutions to  offset  this  but  the  insignificant  sum  of  10  mil- 
lion dollars. 

They  owed  then,  sums  due  immediately  on  demand,  as 
follows : 

Reserves  to  outside  banks $200,000,000 

Reserves  to  their  own  individual  depositors..  .    120,000,000 

U.  S.  Treasury   76.000,000 

Banks,  other  than  National,  Net  Balance 185,000,000 

Or  a  total  of $581,000,000 

They  had  total  cash  of  but  176  million  dollars.  These 
statements  are  almost  past  belief,  but  they  are  made  by  the 
Comptroller  of  Currency,  and  a  copy  of  the  statement  can 
be  had  for  the  asking. 


298  RIGHT  AND  RICHES 

Now  how  would  you  go  about  meeting  immediate  de- 
mands for  581  million  dollars  with  only  176  million  dol- 
lars ?  What  could  you  do  when  the  outside  banks  and  your 
home  depositors  clamored  for  their  money,  but  make  an  un- 
conditional surrender  and  throw  the  whole  system  of  finance 
into  chaos,  spreading  ruin  and  misery  throughout  the  land, 
upsetting  all  lines  of  industry,  cutting  off  the  means  of  the 
employer  to  pay  wages,  and  of  the  worker  to  earn  bread? 

How  great  was  the  sum  of  misery  the  following  winter 
throughout  the  whole  length  and  breadth  of  the  land — 
hunger,  cold  and  desperation,  followed  by  crime — all  pre- 
cipitated by  this  criminal  banking  system.  For  there  was 
no  other  probable  reason  for  interruption  of  industry  but 
the  periodical  plucking  of  their  victims  by  the  manipulators 
of  this  banking  system. 

Yet  what  did  these  big  magnates  do  but  make  a  big 
bluff,  appeal  to  the  United  States  Treasurer,  howl  for  an 
emergency  currency,  demand  another  bond  issue,  and  then 
try  to  throw  the  odium  of  the  whole  criminal  business  onto 
the  People  and  the  Administration? 

Is  it  difficult  to  see  how  profit  may  be  made  by  "The 
System,"  as  Lawson  calls  the  clique  who  dominates  the 
forty  National  banks  of  New  York  City,  and  through  them 
the  big  Insurance  Companies,  Railway  Systems  and  other 
enormous  aggregations  of  capital?  Is  it  not  obvious  how 
advantage  may  be  taken  of  such  a  crisis  to  pile  up  private 
fortunes  ? 

Suppose  Mr.  Magnate,  who  controls  several  of  these 
banks  and  several  other  immense  corporations,  has  pretty 
well  cleaned  out  his  holdings  of  shares  at  top  prices  to  the 
public,  and  has  a  big  credit  balance  in  these  New  York  banks 
as  depositor.  All  he  has  to  do  is  to  check  out  a  few  millions 
and  put  it  in  his  safe  deposit  box,  and  Slam !  goes  the  bot- 
tom out  of  the  market.  He  can  then  take  his  money  out  of 
the  deposit  box  and  buy  back  for  20  million  dollars  what  he 


BANKS  AND  PANICS  299 

has  recently  sold  for  100  million.    This  money  machine  is  a 
veritable  Titanic  pump  to  exhaust  the  people  of  their  wealth. 

And  what  do  these  New  York  banks  do  with  this  vol- 
ume of  money  they  draw  in  from  all  over  the  land?  They 
loan  it  "on  call,"  that  is,  due  on  demand;  they  loan  it  on  the 
security  of  corporation  issues  as  collateral,  with  the  stipula- 
tion that  if  not  paid  on  demand  the  securities  may  be  sold 
to  the  highest  bidder.  But  how  may  300  or  400  million  dol- 
lars of  stock  be  thrown  on  the  market  at  once?  Who  is  to 
buy  ?    It  would  mean  ruin  to  attempt  it,  and  they  know  it. 

When  men  of  moderate  means  fail  to  meet  their  obliga- 
tions they  are  declared  bankrupt  and  put  in  Receivers'  hands. 
But  I  understand  that  courts  which  were  appealed  to  by  de- 
positors to  force  banks  to  pay,  would  not  entertain  such 
suits. 

Do  banks  cause  panics? 

Can  they  help  but  cause  panics  when  they  gather  into 
New  York  City  more  than  one-third  of  the  real  money  de- 
posits of  all  the  banks  in  the  country,  and  use  them  to  spec- 
ulate in  fraudulent  securities? 

The  National  Banking  Law  is  a  most  complete  and  ef- 
fectual scheme  to  give  entire  control  of  the  money  market 
to  the  head  stock-jobbers  of  Wall  Street  and  thereby  to  give 
them  control  of  the  values  of  all  property  in  the  land. 

And  yet  they  want  more.  They  are  clamoring  for  the 
deposit  of  all  the  Federal  revenues  now  held  in  Subtreas- 
uries.  This  would  remove  the  last  resource  of  safety.  When 
the  slump  came  there  would  then  be  no  more  "kind  Uncle 
Sam"  to  go  to,  as  his  money  would  be  included  with  the  rest 
in  stock  deals. 

They  are  also  crying  for  an  emergency  currency.  That 
is,  that  when  they  have  overloaded  themselves  with  loans  on 
collateral  and  otherwise,  they  may  in  a  crisis  issue  "legal 
tender  money"  against  this  collateral. 


300  RIGHT  AND  RICHES 

When  a  clerk  takes  the  funds  entrusted  to  his  care  and 
speculates  in  stocks  or  bets  on  races  it  is  called  an  awful 
crime.  Why  is  it  not  a  worse  crime  when  banks  take  the 
money  you  and  I  deposit  with  them  and  hand  it  over  to  Wall 
Street  gamblers,  and  not  only  endanger  the  loss  of  our  de- 
posits but  the  whole  system  of  commerce  on  which  the  peo- 
ple depend?  It  is  fortunate  that  people  generally  were  not 
so  greatly  in  debt  as  at  times  of  former  panics.  It  was  more 
strictly  a  bank  and  corporation  panic  this  time. 

And  yet,  scientifically  speaking,  this  system  of  greed  is 
but  the  extreme  concrete  expression  of  greed  latent  in  the 
thought  of  the  people  at  large.  It  is  the  embodiment  or 
dominant  expression  of  the  prevailing  desire  to  get  without 
giving.  In  other  words,  the  widespread  greed  of  the  masses 
finally  culminates  in  this  overruling  system  of  spoiliation 
which  succeeds  against  all  other  plans  of  covetousness. 

Senator  La  Follette  has  made  the  statement  that  four- 
teen men  dominate  ihe  entire  resources  and  business  of  the 
land  through  this  system.  Doubtless  of  this  fourteen  there 
is  one  individual  who  is  dominant.  Yet,  dear  reader,  it  is 
not  A.  B.,  or  C.  D.,  or  E.  F.  who  is  responsible  for  this 
system.  It  is  not  the  fourteen  persons  who  are  officially  di- 
recting the  workings  of  this  system  who  are  the  primal 
cause  of  its  existence.  They  are  but  the  temporary  directors 
or  exponents  of  the  culminated  manifestation  of  the  wide- 
spread greed  of  the  community. 

Do  not  too  quickly  conclude  that  the  foregoing  state- 
ments are  vague,  metaphysical  sentiments.  They  are  hard, 
scientific  laws  of  commerce.  We  have  all  read  the  story  of 
the  two  greedy  cats  who  quarreled  about  the  cheese  and  how 
through  their  greed  they  were  made  subject  to  the  monkey 
who  devoured  it  all.  Even  so  does  the  greed  of  the  millions 
consume  them,  each  greedy  person  contending  against  all 
the  rest  and  beating  them  down  to  become  the  prey  of  the 
strongest.      And    this    Wall    Street   system    stands    for   the 


BANKS  AND  PANICS  301 

most  seductive  conception  of  greed,  which  has  cuhninated 
in  the  manipulation  of  the  most  abstruse  and  elusive  phase 
of  economic  forces — the  currency  or  money  supply. 

But  if  a  means  were  instituted  to  exterminate  stock- 
jobbers as  the  leaders  of  oppression  were  guillotined  in 
France,  their  places  would  be  immediately  filled  from  among 
the  ranks  of  the  public. 

"For  we  wrestle  not  against  flesh  and  blood,  but  against 
principalities,  against  powers,  against  the  rulers  of  darkness 
of  this  world."    In  other  words,  against  greed  and  fear. 

The  extent  to  which  greed  may  unconsciously  affect 
public  affairs  is  shown  by  the  stingy  voter  being  against 
measures  of  public  good  because  he  thinks  it  will  increase 
taxes,  even  when  he  pays  not  one  cent  of  taxes. 

Only  that  dominant  thought  which  is  avaricious  will  tol- 
erate legalized  oppression.  But  there  are  many  signs  of 
improvement.  You  do  not  get  the  reply  so  often  now  when 
you  discuss  these  abuses  with  citizens :  "Wouldn't  you  do 
it?" 

F— THE  REMEDIES. 

The  only  sure  cure  is  improved  citizenship,  and  happily 
we  are  making  great  progress  in  this  direction.  Love  and 
brotherhood  will  banish  greed  and  fear.  This  improved 
citizenship  is  expressing  itself  in  improved  legislation  and 
such  legislation  is  helpful ;  it  is  effective,  when  backed  by 
public  opinion. 

Legislation  embracing  the  following  features  might  tend 
to  curb  this  destructive  system  if  enforced  by  honest  offi- 
cials, backed  by  honest  public  thought. 

First.  The  reserve  clause  of  our  National  Bank  law 
should  be  changed  to  require  each  bank  to  carry  its  whole 
reserve  in  its  own  vaults  until  used  to  cancel  its  obligations. 

Second.  Increase  the  reserve  requirement  to  35%  for 
all  banks. 


S02  RIGHT  AND  RICHES 

Third.  Provide  for  the  actual  use  of  this  reserve  for  the 
purpose  for  which  it  is  supposed  to  "be  held,  by  providing 
that  it  may  be  paid  out  to  meet  depositors'  demands  by  the 
bank  paying  7  or  8%  tax  per  annum  on  the  amount  its  re- 
serve is  thus  depleted.  And  instead  of  an  emergency  cur- 
rency provide  for  a  period  of  grace  of  a  few  days'  extent, 
available  both  to  the  banks  against  their  depositors  and  to 
those  who  owe  the  banks,  by  the  payment  of  a  certain  reas- 
onable percentage  as  penalty  to  the  waiting  creditor. 

Fourth.  Prohibit  call  loans,  for  they  endanger  the  bor- 
rower individually  and  in  the  end  the  banks  collectively. 

Fifth.  Prohibit  more  than  a  small  percentage  of  depos- 
its being  loaned  on  collateral. 

Sixth.  To  prevent  banks  sending  their  money  to  New 
York  and  other  centers,  prohibit  banks  from  receiving  in- 
terest from  other  banks  and  forbid  State  banks  loaning 
money  outside  their  own  State. 

Seventh.  Compel  banks  at  least  once  a  month  to  pub- 
lish a  statement  of  the  actual  cash  in  their  vaults,  the  amounts 
owing  by  them  to  other  banks,  as  well  as  what  other  banks 
owe  them. 

Eighth.  Reduce  the  percentage  that  a  single  firm  may 
borrow  of  the  loanable  funds  of  a  bank. 

Ninth,  Prevent  banks  from  paying  more  than  2%  in- 
terest on  deposits. 

Tenth.  Forbid  the  investment  of  deposits  in  securities 
which  mature  at  a  more  distant  date  than  three  months. 
This  would  cut  out  bonds  and  stocks. 

Eleventh.  Withdraw  the  function  of  issuing  currency 
notes  from  banks  and  replace  such  notes  with  legal  tender 
money  issued  directly  by  government.  Also  provide  for  dis- 
posal of  Treasury  accumulations  as  suggested  under  the 
head  of  "A  Rational  Money  Plan." 

Twelfth.    Establish  Postal  Banks. 


BANKS  AND  PANICS  303 

The  recent  action  of  the  banks  in  refusing  to  pay  depos- 
itors their  money  when  due,  that  is,  on  demand,  suggests 
the  question,  why  should  not  all  debtors  at  all  times  have  a 
few  days  of  grace  ?  It  is  a  well-established  fact  that  values 
are  more  staple,  where  there  is  a  long  period  of  redemption 
from  mortgages.  These  statutory  redemption  periods  are 
good  alike  for  lenders  as  well  as  borrowers  and  especially  for 
the  general  public  through  prevention  of  panic.  Why,  if  one 
owes  a  note  or  obligation,  not  give  him  twenty  to  sixty  days' 
grace,  with  a  reasonable  penalty,  not  of  court  costs,  but  in- 
creased interest?  It  would  save  many  good  men  from  fail- 
ure.    If  good  for  banks,  why  not  for  the  people? 

In  States  where  there  is  no  redemption  from  real  estate 
mortgage  sales,  values  are  seriously  impaired  thereby.  The 
maker  of  the  loan  seldom  really  wants  the  money,  but  fore- 
closes while  he  is  frightened. 

Is  it  not  the  duty  of  law  makers  to  restrict  banking  to  its 
safe  and  useful  function? 

Properly  restricted,  banks  are  a  useful  and  powerful  aid 
to  industry,  prosperity  and  progress. 

A  bank's  proper  function  is  to  have  a  knowledge  of  its 
customers'  proper  standing  and  trustworthiness;  to  have 
such  capital,  and  conservative  and  honest  management  as 
causes  people  to  place  confidence  in  it;  and  to  lend  its  en- 
dorsement, backed  by  this  popular  confidence,  to  those  cus- 
tomers, by  giving  them  a  reasonable  amount  of  credit,  lim- 
ited by  the  legitimateness  of  the  purpose  of  their  use  of  it, 
and  by  the  bank's  capacity  after  maintaining  a  conservative 
reserve. 

No  interference  with  such  function  should  be  oflfered  by 
legislation,  but  should  conservative  restrictions  reduce  the 
average  net  profits  of  banks  from  what  they  have  been  com- 
monly earning,  10  to  12%,  I  cannot  see  that  great  hardship 
would  be  done  them.     At  any  rate,  the  public  has  a  right  to 


304  RIGHT  AND  RICHES 

demand  legal  protection  against  the  present  panic-breeding 
system. 

No  great  permanent  progress  can  be  made  by  labor  in 
securing  its  rightful  wage ;  no  sure  promise  of  safety  can  be 
made  to  conservators  of  true  capital  for  its  safety  from  loss, 
while  banks  may,  in  response  to  the  criminal  gamblers  of 
Wall  Street,  inflate  credit  and  currency  beyond  all  bounds, 
with  the  resultant  annihilation  of  both  credit  and  currency. 
This  leaves  honest  industry  not  alone  without  credit,  but 
without  a  medium  of  exchange,  and  by  such  disorganization 
almost  entirely  without  a  market. 

Let  industry  grow  up  on  a  broad  solid  "Concrete  foun- 
dation," and  there  will  be  a  chance  for  permanent  progress 
and  reform. 

But  currency  and  banking  reforms  will  not  prevent  Con- 
cession from  absorbing  Rewards  of  Production  in  propor- 
tion to  the  increase  of  prosperity,  and  thereby  finally  curtail- 
ing output  and  causing  depression.  Such  reforms  can  only 
prevent  such  sudden  and  violent  collapse.  Money  reform 
will  prevent  the  wild  inflation  of  debt  and  largely  prevent 
stock  jobbing.  But  no  system  of  money  will  prove  a  total 
cure  for  the  evils  of  Concession.  These  evils  exist  under 
all  kinds  of  money  systems,  but  to  prevent  panics  means 
much. 


CHAPTER  V. 
The  Importance  of  Industrial  Corporations. 


mm 


'"'c 


ANKS,  by  reason  of  government  patronage  and  the 
special  privileges  or  concessions  they  have  obtained, 
hold  a  place  in  the  commerce  and  industry  of  to- 
day far  beyond  what  is  normal  or  safe.  They  are 
the  cause  of  an  application  of  capital  by  the  loan  avenue, 
dangerously  in  excess  of  what  is  natural,  economical  or  safe. 
Buying  shares  (not  bonds)  of  joint-stock  companies,  thus 
applying  capital  directly  to  productive  purposes  without  the 
incurring  of  debt  or  credit,  is  a  far  saner,  safer,  and  more 
direct  and  economical  method  than  by  lending  it  to  (deposit- 
ing it  in)  banking  concerns  and  trust  companies  constituting 
them  a  ''blind  pool"  to  relend  it  to  others,  to  again  relend  or 
invest  it  for  the  purchase  of  capital.  The  corporation,  both 
small  and  large,  is  one  of  the  grandest  forms  of  civilization's 
blessings. 

Dr.  Lyman  Abbott,  addressing  the  People's  Institute  at 
New  York  on  the  "Coming  Age,"  caused  a  sensation  by  de- 
claring that  corporations  were  tending  to  fraternalism  in 
industry.  He  pointed  out  that  the  stockholders  of  the  great- 
est trusts  had  increased  from  hundreds  to  thousands,  and 
said  that  if  the  number  continues  to  increase,  it  will  mean 
that  the  ownership  of  these  gigantic  corporations  will  be 
distributed  more  and  more.    He  said : 

"Do  not  destroy  corporations,  if  they  will  manage  things 
for  the  good  of  the  whole,  and  the  people  can  make  men  to 
manage  these  interests  properly  and  do  away  with  the  evils 
that  exist  in  them  to-day.  As  examples  of  the  fraternalism 
which  I  say  is  coming,  I  might  point  to  President  Roosevelt's 
proposed  tax  on  inheritances,  Bryan's  proposed  tax  on  in- 
comes, Henry  George's  proposed  tax  on  all  natural  opportunities 

305 


306  RIGHT  AND  RICHES 

and    the    whole    country's     proposition     that     the     people     shall 
operate   the   great  highroads   of  the   United  States." 

Civilization — brotherhood — impels  men  to  have  mutual 
interests,  to  trust  each  other.  This  suggests  another  unfor- 
tunate reason  for  the  abnormal  volume  of  bank  deposits, 
that  is,  that  the  unscrupulous  methods  of  some  of  the  great 
stock  manipulators  prevent  investments  in  stocks. 

Corporation  scrutiny  and  restriction  is  coming,  none  too 
soon.  The  mistaken  outcry  against  the  mere  magnitude  of 
corporations  we  have  heard  for  so  long  is  wasted  energy. 
But  it  is  of  the  greatest  importance  to  society  to  have  all 
capital  employed  at  useful  work  as  well  as  all  labor.  A 
thousand  people  with  $100  can  furnish  $100,000  capital  if 
it  may  be  collected  together.  But  corporations  offer  a  better, 
steadier  and  more  direct  process  of  applying  this  capital 
than  do  banks.  The  industrial  corporation  may  not  preclude 
the  need  of  banks,  but  rightly  restricted  it  would  take  their 
place  in  a  large  measure  as  a  place  of  deposit  for  capital. 

But  to  be  reliable  they  must  be  restricted  against  issuing 
bonds.  Bonds  help  make  panics.  They  create  the  disturb- 
ances from  the  change  of  interest  rates.  If  corporations 
got  their  capital  entirely  from  the  sale  of  stock,  they  would 
have  no  trouble  from  high  interest  rates,  for  then  would 
dividends  also  be  high. 


'to' 


By  far  the  larger  portion  of  debt  consists  of  corporation 
bonds ;  they  pay  no  larger  per  cent,  when  there  is  prosperity, 
as  they  usually  run  for  long  periods.  Companies  do  not 
wish  to  sell  bonds  for  a  long  period  at  high  rates,  when  hard 
times  may  reduce  income  in  a  short  time.  Hence  we  see  the 
great  railroads  and  industries  trying  to  get  capital  by  over- 
loading banks  with  short-time  notes,  thereby  tempting  fate 
and  panic.  Corporations  could  at  all  times  sell  their  stock 
to  make  extensions  or  betterments,  if  they  owed  no  bonds 
and  were  free  from  clique  manipulation.     If  they  were  free 


INDUSTRIAL  CORPORATIONS  307 

from  debt  they  could  continue  a  large  degree  of  operations 
during  the  most  depressing  times. 

Millions  upon  millions  of  bonds  are  issued  in  good  times 
with  no  limit  but  the  ability  to  sell  them ;  then  as  a  matter  of 
course  when  depression  comes  they  cannot  even  get  money 
to  pay  current  expenses.  An  individual  almost  universally 
limits  his  debts  to  what  he  thinks  he  may  safely  pay.  But  a 
corporation  having  no  personality  has  no  personal  liability. 
The  stockholders  in  control  often  over-issue  bonds,  buying 
them  at  a  few  cents  on  the  dollar  for  the  sole  purpose  of  fore- 
closure. Then  they  sell  their  stock,  buy  the  bonds,  and  take 
the  whole  property  under  foreclosure,  thus  criminally  de- 
priving the  stockholders  of  their  property.  Not  only  that, 
but  the  great  mountains  of  bonds  are  in  times  of  depression 
the  great  incubus  on  industry. 

Private  persons  must  go  into  debt.  Business  cannot  be 
done  without  it,  but  it  is  not  essential  for  corporations  to  go 
into  debt.  They  may  instead  issue  more  stock.  Stock  is 
not  a  debt,  but  a  direct  partnership  title.  The  State  has  a 
right  to  refuse  to  allow  bond  issues  by  corporations.  The 
sole  thing  to  be  considered  in  granting  corporation  charters 
is  the  public's  good.  Any  phase  of  their  actions  which  is  a 
public  evil  should  be  stopped.  Bond  issues  are  a  great  evil 
to  the  public  in  general  and  to  the  stockholders  in  particu- 
lar. The  gigantic  robbery  of  stockholders  through  the  graft 
of  cliques  has  lately  been  a  revelation  to  the  public.  In  one 
instance  especially,  a  clique  issued  bonds  to  themselves  awav 
below  par  and  immediately  marketed  them  at  several  millions 
profit.  These  graft  swindlers  are  of  several  types.  There  is 
the  same  clique  controling  two  corporations,  having  little 
interest  in  one,  and  robbing  it  to  enrich  the  other,  where 
they  are  large  owners.  There  is  the  holding  of  the  stock  of 
one  corporation  by  another.  This  is  so  palpably  unnecessary 
and  such  an  infamous  means  to  rob  the  stockholders,  and  es- 


308  RIGHT  AND  RICHES 

pecially  the  public,  that  legislators  have  no  excuse  for  allow- 
ing it. 

But  the  crowning  means  of  swindling  is  bonding  and  the 
resulting  reorganization.  A  corporation  should  only  be  al- 
lowed to  issue  stock.  Should  its  assets  shrink,  the  law  should 
provide  that  all  stock  should  be  surrendered  and  a  smaller 
amount  taken  in  exchange  pro  rata  by  each  stockholder,  in 
the  same  manner  that  increased  issues  are  now  alloted  pro 
rata.  By  this  means  a  quantity  of  stock  could  be  taken  from 
the  stockholders  and  placed  in  the  treasury  to  be  sold  to  pay 
debts  or  acquire  the  new  capital  needed.  There  is  no  limit 
to  the  workings  of  this  plan.  A  million-dollar  corporation 
finding  its  assets  shrunken  to  $600,000,  and  itself  in  need  of 
$100,000  additional  capital,  could  call  for  a  surrender  of 
50%  of  all  stock.  Four-fifths  of  this  could  be  canceled  and 
the  remaining  $100,000  turned  into  the  treasury.  It  would 
now  be  worth  par  and  could  be  sold  to  get  the  new  capital. 
Corporations  should  be  compelled  to  maintain  their  stock 
near  par.  What  a  travesty  on  honesty  to  allow  such  a  cor- 
poration to  issue  on  top  of  its  $1,000,000  stock  another  mil- 
lion of  bonds  to  be  sold  for  perhaps  $200,000,  making  a  total 
outstanding  capitalization  of  $3,000,000  and  only  $800,000 
real  capital.    No  wonder  Wall  Street  is  rotten. 

Prohibit  corporation  bonds ;  reduce  stock  to  a  par  basis ; 
provide  that  it  shall  be  transferred  on  a  public  record,  as  real 
estate  is.  Charge  a  small  fee  for  each  transfer,  not  enough 
to  deter  actual  investors  in  bona  fide  industries  from  buy- 
ing, but  enough  to  stop  idle  gambling.  The  corporations  of 
the  country  are  of  vital  concern  to  every  citizen.  It  is  very 
important  that  capital  be  available  to  output  the  abundant 
native  wealth.  Whatever  increases  the  danger  of  investment 
obstructs  production,  makes  the  means  of  subsistence  more 
difficult  to  obtain. 

But  what  is  the  need  for  unlimited  transfer  of  stock,  in 
volume  equal  to  the  total  of  listed  stocks  in  short  periods? 


INDUSTRIAL  CORPORATIONS  309 

This  does  not  promote  the  legitimate  interests  of  corpora- 
tions, but  only  the  interest  of  the  stock  gambler.  The  Stock 
Exchange  is  not  an  essential  to  corporations'  real  interests, 
any  more  than  the  infamous  race  track  poolroom  is  of  benefit 
to  the  live  stock  industry. 

When  corporations,  whether  engaged  in  industry,  pub- 
lic service  or  banking,  assume  such  magnitude  as  to  be  vital 
to  public  interest,  they  should  be  declared  semi-public  and 
the  public's  interest  should  be  asserted  and  represented  by  a 
reasonable  number  of  members  on  the  board  of  directors. 

If  corporations  were  not  loaded  down  with  inflated  issues 
on  which  the  holders  demand  interest  and  dividends,  they 
would  not  be  compelled  to  cut  wages  or  "lay  off"  employes 
with  the  slightest  recession  of  business.  If  these  issues  were 
only  allowed  upon  an  exhibit  in  detail  of  their  assets,  the 
amount  of  growth  in  the  value  of  franchises  and  monopo- 
lies would  be  disclosed. 

We  cannot,  with  safety  either  to  industry  or  to  the  very 
existence  of  our  government,  much  longer  defer  corpora- 
tion reform.  All  industrial  progress  and  government  hon- 
esty depends  on  corporation  integrity. 

Not  the  size,  but  the  conduct  of  a  corporation  is  what 
demands  attention.  Large  corporations  are  not  essentially 
vicious,  but  when  they  are,  they  are  capable  of  greater  harm. 
They  are  also  capable  of  functions  vital  to  Society,  which 
only  they  can  perform,  until  such  time  as  our  legislative  and 
executive  bodies  become  sufficiently  educated  and  honorable 
to  give  us  public  ownership. 

Do  not  imagine  that  because  you  own  no  corporate  shares 
you  have  no  interest  in  corporate  matters.  Your  interest  is 
scarcely  less  than  though  you  were  a  chief  stockholder.  The 
wage  earner's  employment  depends  on  the  right  conduct 
of  corporations,  as  does  the  merchant's  success,  or  even  the 


310  RIGHT  AND  RICHES 

religionist's  or  reformer's  progress.  This  becomes  a  more 
vital  problem  as  business  tends  more  and  more  to  corporate 
form. 

Will  the  patriotism  of  our  citizens  be  sufficient  for  its 
solution  ? 


PART    SEVEN. 


Right  Use  and  Plenteous  Supply. 


Chapter    I.     Waste  and  Want. 

II.     Governmental    Reform    and    Individual 
Opportunity. 


20- 


CHAPTER  I. 
Waste:  and  Want. 

"Seemeth  it  a  small  thing  unto  you  to  have  eaten  up 
the  good  pasture,  hut  you  must  tread  down  with  your 
feet?  And  to  have  drunk  of  the  deep  waters,  but  ye 
must  foul  them  with  your  feet?  And  as  for  my  flock, 
they  eat  that  which  ye  have  trodden,  and  they  drink 
that  which  ye  have  fouled  with  your  feet." 

NUMEROUS  school  holds  the  theory  that  waste, 
by  some  subtle  means,  increases  production.    The 
theory  is  more  than  a  subject  for  idle  debate.     It 
makes  a  virtue  of  the  profligacy  of  the  idle,  which 
enslaves  the  industrious. 

It  is  not  so  simple  a  matter  as  it  might  at  first  seem,  to 
combat  these  advocates  of  waste.  They  embrace  the  multi- 
tude, yet  the  number  who  perceive  the  scientific  truth  is  rap- 
idly increasing.  It  is  strange  that  intelligent  people  could 
ever  hold  to  such  an  impossible  theory.  Yet  it  is  common, 
though  less  so  than  formerly,  to  hear  war  advocated  as  pro- 
moting good  times,  to  hear  the  liquor  and  tobacco  traffics  de- 
fended as  helps  to  business  activity.  Persons  apparently 
moral  and  honest  will  assert  that  the  vicious  and  idle  revel- 
ings  of  vulgar  wealth  help  trade  and  commerce.  The  same 
school  urges  the  appropriation  of  public  funds  for  the  most 
useless  of  projects,  maintaining  that  labor  is  thereby  em- 
ployed and  business  improved. 

From  what  inverted  logic  has  such  policy  evolved? 
Partly  by  the  blinding  shortsightedness  of  greed.  This  sel- 
fish reasoning  would  welcome  the  grubbing  out  of  orchards 
if  it  might  profit  from  the  wages  of  those  thereby  employed, 
regardless  of  the  loss  of  future  fruit ;  or  the  burning  of  fields 

313 


314  RIGHT  AND  RICHES 

of  cotton  or  elevators  full  of  f^rain  to  enhance  the  prices. 
Persons  powerful  in  the  councils  of  state  advocate  the  en- 
couragement of  production  with  a  view  solely  to  the  profit 
of  industrial  proprietors. 

What  reasonable  motive  can  there  be  for  production  but 
to  provide  a  supply  for  wholesome  needs  ?  Much,  no  doubt, 
is  ennobling  in  the  arts  and  avocations  which  produce.  All 
nature  abhors  idleness.  It  is  ever  accompanied  with  degen- 
eracy. But  effort  and  exertion,  without  rational  purpose, 
are  not  far  removed  from  the  nature  of  idleness. 

One  might  suppose  that  these  strenuous  advocates  of 
production,  who  care  nothing  for  lack  and  distress,  were 
moved  by  some  exuberant  flood  of  energy,  which  compelled 
them  to  "do  or  die ;"  but  instead  they  are  impelled  by  the 
most  sordid  greed.  It  is  not  passion  to  create,  but  to  get, 
that  moves  them. 

The  normal  inspiration  to  create  is  the  desire  to  give, 
to  bless,  humanity.  The  "pay"  or  profit  is  a  secondary  con- 
sideration for  a  noble  effort.  This  will  not  at  first  seem  true 
in  practical  experience ;  yet  who  does  not  recognize  the  pre- 
cept as  true  that  an  employe  who  "watches  the  clock"  will 
never  be  promoted.  Recompense — compensation  subse- 
quently— is  certainly  due,  but  is  the  secondary,  and  not  the 
primary  impulse.  The  wheels  of  commerce  would  stand 
still  if  there  were  no  other  motive  than  greed.  None  should 
engage  in  any  work  seriously  without  having  in  mind  the 
utilitv  of  the  result. 

This  school  cares  nothing  for  consumers.  Who  is  hungry 
or  naked  is  the  lea^t  of  their  concerns.  They  are  worried 
about  retaining  a  market  for  some  great  grinding  mill.  The 
selfishness  of  such  economists  is  the  basis  of  their  logic. 
Their  school  should  be  called  "inverted  economics."  True 
economics  seeks  to  find  the  underlying  principles  of  com- 
merce, that  thereby  commerce  may  furnish  abundance  to  all. 
Are  thousands  starving?     The  true  school  seeks  the  cause. 


WASTE  AND  WANT  315 

Are  people  freezing  to  death  in  the  streets  of  New  York,  a 
city  whose  wealth  is  the  wonder  of  the  earth  ?  It  asks  what 
is  out  of  gear.  Those  of  the  inverted  school  seek  scarcity 
of  what  they  produce  that  prices  may  be  high.  The  ex- 
tremists of  this  school  will  go  to  any  lengths  to  cause  such 
scarcity.  Their  favorite  method  is  a  protective  tariff.  An- 
other is  a  high  freight  rate  with  a  rebate.  Trusts,  combina- 
tions, graft  and  commercial  slugging  are  among  the  methods 
of  retarding  output. 

Hon.  Leslie  M.  Shaw,  addressing  700  students  in  the 
Harvard  Union,  prophesied  a  gigantic  international  trade 
war  for  the  twentieth  century,  a  contest  which  in  bitterness 
would  surpass  the  awful  battles  that  were  fought  out  during 
the  century  just  passed  with  bayonet  and  powder.     Said  he: 

"England,  France  and  Germany  have  long  been  depend- 
ent upon  their  manufacturers  for  their  national  subsistence. 
We  have  long  regarded  ourselves  as  an  agricultural  nation, 
but  at  the  present  time  we  are  manufacturing  5  per  cent,  more 
articles  than  we  can  consume,  and  our  manufactures  are  in- 
creasing four  times  as  fast  as  our  agricultural  pursuits. 
These  figures  plainly  show  that  before  long  we,  too,  will  have 
to  be  dependent  upon  a  foreign  market  in  order  to  support 
our  manufacturers.  We  must  have  this  market  if  we  are  to 
exist.  So  must  England,  Germany  and  France.  The  con- 
flict will  be  an  awful  one.  God  grant  that  it  may  be  blood- 
less." 

But  why  in  the  name  of  reason  should  we  wish  our  man- 
ufacturers supported  when  we  no  longer  need  their  wares? 
And  would  not  a  normal  infant  ask  why  we  should  wish  to 
send  away  our  products  except  to  procure  the  many  things 
vv'e  desire,  and  to  supply  those  who  lack. 

One  of  the  priests  of  this  creed  was  quoted  in  a  recent 
publication  as  being  in  great  appreliension  because  Japan  is 
colonizing  Manchuria  with  wheat  raisers,  and  Korea  with 
cotton  growers. 


316  RIGHT  AND  RICHES 

Dreadful  calamity  to  contemplate !  Awful,  cruel,  bar- 
baric Japan  to  undertake  to  feed  and  clothe  her  people! 
"But,"  says  this  priest,  "it  will  rob  America  of  her  market 
in  Asia  for  wheat  and  cotton."  The  same  journal  told  of 
the  freezing  of  poorly  clad  Americans. 

Contrast  such  economics  with  the  desire  of  a  true  econo- 
mist to  irrigate  a  new  State,  or  to  drain  and  put  a  sea  wall 
about  the  Mississippi  Delta,  that  our  food  and  clothing  sup- 
ply may  be  increased.  It  may  be  safely  said  that  America 
never  raises  enough  cotton  to  plentifully  clothe  even  her 
own  people.  Perhaps  some  day  she  shall,  but  never  shall 
she  be  burdened  by  a  single  bale  too  much. 

The  following  editorial  from  the  St.  Louis  Post-Dispatch 
is  logical : 

"The  Booklovers'  Magazine  for  April  published  an  article 
by  Harold  Bolce  in  which  he  took  great  pains  to  show  that  we 
have  but  a  trifling  share  of  the  trade  of  South  America,  the 
Orient  and  Oceanica.  The  facts  presented  by  Mr.  Bolce  are  in- 
disputable, but  the  inference  he  appears  to  draw  that  our 
manufacturers  show  lack  of  energy  is  entirely  unwarranted. 
Mr.  Bolce,  like  a  great  many  other  critics  of  the  industrial 
situation,  appears  to  be  unable  to  grasp  the  idea  that  it  is  a 
big  job  to  cope  with  the  demands  of  a  country  growing  as 
rapidly  as  the  United  States.  When  our  manufacturers  accom- 
plish that  successfully,  they  achieve  infinitely  greater  results 
than  those  of  any  other  nation.  Mr.  Bolce  should  not  lose 
sight  of  the  fact  that  the  value  of  the  output  of  American 
factories  exceeds  that  of  its  three  greatest  rivals.  We  ought 
to  felicitate  ourselves,  that  we  not  only  manufacture  more,  but 
consume  more,  than  any  other  people  on  the  globe." 

Satisfaction  is  the  ultimate  of  trade.  Foreign  trade  that 
is  natural  is  good.  It  gets  nations  acquainted  and  promotes 
good  feeling.  It  is  right  for  government  agents  to  investi- 
gate foreign  fields  and  report  the  situation. 

Various  industrial  associations  might  do  well  to  have 
agents  touring  our  own  States  to  educate  users  and  report 
needs.     Home  trade  is  what  counts  in  productive  volume. 


WASTE  AND  WANT  317 

Think  what  interest  is  felt  about  Chinese  trade.  Some  advo- 
cate the  expenditure  of  milhons  of  money,  and  men  too  if 
need  be,  to  get  it ;  while  the  others  are  in  dread  lest  they  shall 
produce  what  we  wish  to  sell. 

A  daily  paper  remarks  : 

"The  Pacific  Coast  views  with  alarm  an  alleged  boycott 
by  Chinese  merchants  against  American  goods.  So  long 
as  Chinese  immigrants  are  barred  here,"  the  tale  of  horrors 
runs,  "so  long  will  the  Celestial  merchant  prince  taboo  our 
wares." 

Terrible  if  true!  China  bought  from  us  in  1904  $12,862,- 
000  worth  of  goods,  almost  exactly  3  cents'  worth  for  each  of 
her  population.  There  is  in  Europe  a  little  country  smaller  than 
Texas,  19  times  smaller  than  China,  that  bought  of  us  in  the 
same  year  $213,723,000  worth  of  goods,  or  $3.85  per  person. 
That  country  is  the  German  Empire. 

A  Chinaman  at  home  patronizes  Uncle  Sam's  shop  to  the 
enormous  extent  of  3  cents.  Every  German  spends  in  it  nearly 
$4.00  a  year.  Yet  we  are  pouring  out  money  by  the  hundreds 
of  millions  for  power  and  prestige  on  the  Pacific,  with  fatuous 
eyes  fixed  on  "the  future  trade  of  the  Orient,"  and  don't  even 
take  the  trouble  to  frame  a  reciprocity  treaty  when  our  present 
trade  with  Germany  is  threatened  with  serious  diminution. 
Was    ever    commerce    with    such    folly    sought — or  shunned?" 

This  paper  might  further  have  asked,  How  much  does 
the  average  American  patronize  Uncle  Sam's  shops? 

The  best  basis  of  business,  either  individual  or  national, 
is  to  provide  those  things  that  shall  well  and  truly  supply 
wholesome  needs,  and  take  little  thought  of  markets. 

The  following  is  a  most  sensible  and  broadminded  view 

of  the  future  %i  Pacific  trade : 

"As  industry  develops — when  Japan  and  even  China  be- 
come really  great  manufacturing  countries  in  the  modern  sense, 
and  especially  when  the  great  natural  resources  of  China 
begin  to  be  developed  and  the  habits  and  wants  of  the  people 
become  more  numerous  and  complex,  as  the  habits  and  wants 
of  all  peoples  do  in  proportion  to  the  development  of  their 
industrial  life — a  trade  will  grow  up  across  the  Pacific  ana- 
logous to  the  trade  that  now  goes   back  and   forth  across  the 


318  RIGHT  AND  RICHES 

Atlantic.  Our  best  customers  now  are  those  nations  that  are 
furthest  advanced  in  industry — England,  Germany  and  France. 
This  great  law  of  commerce  will  not  be  changed  because 
the  Japanese  and  the  Chinese  now  have  cheap  labor.  If 
Japan  proves  equal  to  her  great  industrial  opportunity,  as  she 
proved  equal  to  her  military  necessity,  the  whole  world  will 
profit  by  the  development  that  she  will  set  going." 

A  narrow  view  in  one's  personal  affairs  might  be  ex- 
pected, but  for  those  posing  as  statesmen  to  advocate  re- 
striction of  production  and  wasteful  methods  is  little  less 
than  criminal. 

Individualistic  selfishness  that  takes  no  cognizance  of  the 
interest  of  others,  nor  of  the  intelligent  self-interest  result- 
ing from  the  general  welfare,  sees  no  difference  between 
being  employed,  to  build,  plant,  develop ;  or  to  devastate  and 
destroy.  But  there  is  a  widespread  cause  for  this  false 
reasoning.  It  is  based  on  the  universal  economic  slavery 
of  the  masses  to  those  who  govern  the  means  of  production 
— the  natural  materials  of  which  wealth  is  made. 

But  greed  forges  its  own  chains.  Its  only  view  is  that 
of  the  chance  to  be  employed.  The  chance  to  use  some  of 
the  wealth  that  arises  from  these  natural  stores  or  sources, 
by  getting  it  as  wages.  They  care  not  whether  their  work 
may  produce  or  destroy  so  long  as  wages  are  paid.  Does 
the  worker  in  the  distillery  or  brewery  think  of  the  ruin  his 
productions  are  causing? 

On  the  other  hand,  the  employing  class  have,  under  this 
abnormal  situation,  come  to  regard  themselves  as  the  bene- 
factors of  those  they  employ,  holding  the  emptoyed  as  under 
obligations  to  their  employer,  instead  of  the  employer  being 
lucky  to  have  someone  to  relieve  him  of  his  task. 

A  dear  good  lady  in  telling  of  the  difficulty  of  getting 
washing  done  in  a  certain  place,  said  she  finally  found  an  old 
colored  lady  who  said  she  was  very  busy  but  would  ''try  by 
working  late  into  the  night"  to  accommodate  her  next  day. 
Whereat  this  good  lady  became  indignant  and  told  the  col- 


WASTE  AND  WANT  319 

ored  lady  she  did  not  wish  to  be  "accommodated,"  that  she 
wished  to  pay.  Her  friend  to  whom  she  was  talking  took 
her  to  task  and  asked  by  what  logic  she  thought  it  other 
than  an  accommodation  to  have  the  woman  go  to  such  extra 
pains  to  do  her  work.  We  do  not  resent  a  bank's  "accom- 
modating" us,  even  though  we  pay  interest  and  our  security 
is  good. 

A  foolish  justification  of  waste  is  that  it  puts  money  in 
circulation.  "Wait  until  he  is  dead,  his  boys  will  put  his 
money  in  circulation"  is  a  common  remark.  Now  it  is  quite 
true  that  many  men  of  means  are  too  cautious  of  investing 
in  progressive  things,  but  it  is  not  true  that  rich  men  keep 
a  quantity  of  currency  idle.  They  often  do  great  injury  by 
keeping  resources  idle. 

"The  money  is  not  wasted"  is  a  common  expression.  Tt 
is  as  though  one  should  watch  a  child  with  a  cup  dip  up 
cream  from  a  vessel  and  pour  it  into  the  sewer,  and  should 
say,  "Oh,  the  cup  is  not  wasted." 

Money  is  only  a  cup  to  dip  and  measure  wealth. 

A  man  of  great  prominence  expressed  himself  in  one  of 
the  magazines  that  the  heirs  soon  diffuse  the  estate  among 
the  community.  As  well  might  we  say  a  conflagration  dif- 
fuses the  wealth  consumed  among  the  people  of  the  com- 
munity. How  foolish!  When  $1,000  is  spent  foolishly  it 
is  not  in  the  slightest  a  question  of  money.  That  much  value 
is  annihilated.  Rich  people  spend  little  currency ;  hai'c  very 
little  compared  to  their  expenditures.  They  spend  credit 
and  redeem  it  with  property.  A  fortune  spent  wastefully 
is  a  fortune  lost  to  the  whole  world.  Some  may  profit  by 
easy  bargains  with  such  heirs,  but  such  bargains  are  mere 
incidents ;  while  a  carefully  managed  estate  is  likely  to  be  a 
source  of  continuous  benefit  to  the  whole  community. 

There  is  no  benefit  in  the  mere  process  of  money  circula- 
tion. Money  circulation  usually  accompanies,  arises  from, 
exchange ;  but  exchange  may,  or  may  not,  be  part  of  the 


320  RIGHT  AND  RICHES 

process  of  wealth  production.  A  race  track  is  a  place  where 
much  money  changes  hands.  Yet  it  often  results  in  the 
failure  of  many  useful  business  enterprises  through  money 
lost  there.  Certainly  the  whole  expense  of  maintaining  a 
race  track  is  a  total  loss ;  besides  there  is  the  loss  of  time  of 
all  patrons. 

The  function  performed  by  money  is  perhaps  the  most 
misunderstood  of  all  the  things  with  which  man  comes  in 
constant  contact.  These  confused  theories  constitute  money- 
spending  a  creator  of  wealth,  even  when  its  efifects  are  the 
worst  form  of  wealth  destruction  and  waste  of  labor. 

Wealth  is  a  stream  supplied  by  production  and  exhausted 
by  expenditure.  Little  accumulates.  Of  the  year's  produc- 
tion but  a  fraction  remains  at  the  end  of  the  year.  Its  ex- 
penditure is  divided  between  reproductive  capital  and  ulti- 
mate consumption.  Consumption  embraces  normal  use  and 
lavish  waste.  Production  promptly  responds  to  the  class  of 
consumption  by  replenishing  the  various  kinds  of  commo- 
dities in  proportion  to  their  exhaustion ;  hence  consumption 
determines  the  character  of  production.  An  overconsump- 
tion  of  luxuries  tends  to  an  underproduction  of  essentials. 
This  power  of  directing  industry  is  exercised  not  alone  by 
the  ownership  and  superintendence  of  factories,  fields  or 
mines,  but  by  simple  money-spending.  How  the  owners  of 
a  large  income  are  in  a  position  of  power  is  well  illustrated 
by  one  having  sole  direction  of  a  supply  of  water.  Such  a 
person  might,  by  the  opening  or  closing  of  sluices,  turn  all 
the  water  to  the  turbine  wheel  to  produce  electricity,  or  to 
pleasure  grounds  and  parks,  to  please  the  whim  of  some 
Croesus,  leaving  millions  of  people  perishing  for  water  to 
drink.  Or  by  properly  seeing  and  doing  his  duty  he  could 
so  distribute  the  precious  resource  in  his  charge  as  to  give 
ample  supply  for  necessity  and  reasonable  pleasure. 

Does  not  the  buyer  of  shoes  direct  labor  and  capital  to 
making  shoes ;  the  buyer  of  horses  to  the  growing  of  horses ; 


WASTE  AND  WANT  321 

the  buyer  of  beer  to  the  making  of  beer,  and  of  bread  to  the 
making  of  bread?  Ships  make  travel  and  travel  makes 
ships.  To  use  the  eloquent  words  of  Ruskin,  "For  you  who 
have  it  (riches  or  property)  in  your  hands  are  in  reality  the 
pilots  of  the  power  and  effort  of  the  State.  It  is  entrusted 
to  you  as  an  authority  for  good  or  evil,  just  as  completely 
as  kingly  authority  was  ever  given  to  a  prince,  or  military 
command  to  a  captain." 

But  this  grand  man  did  not  perceive  the  limitations  of 
industry;  for  economic  science  was  yet  young  in  his  day. 
Hence,  the  error  of  the  further  statement  he  makes.  "And 
according  to  the  quantity  of  it  (wealth)  that  you  have  in 
your  hands  you  are  the  arbiters  of  the  whole  issue.  Whether 
the  work  of  the  State  shall  suffice  for  the  State  or  not  de- 
pends upon  you." 

Many  think  that  industry  depends  on  the  capital  of  the 
rich,  instead  of  seeing  that  it  depends  upon  the  permission 
of  those  who  dominate  natural  resources.  To  think  that  the 
liberal  patronage  of  an  industry  by  the  rich,  the  spending 
of  money  for  luxuries  and  service,  adds  to  the  total  employ- 
ment of  labor  and  capital  is  an  error  not  to  be  wondered  at. 
This  patronage  certainly  employs  those  directly  concerned 
and  makes  the  industries  patronized  more  prosperous,  as  we 
have  just  pointed  out,  but  it  does  so  at  the  expense  of  other 
industries. 

Goldsmith,  inspired  poet  of  economics,  had  a  clear  con- 
ception of  this  truth  and  plead  with  the  people  of  his  day  in 
these  sublime  lines : 

"Ye  friends  of  truth,  ye  statesmen  who  survey 
The  rich  man's  joys  increase,  the  poor's  decay 
'Tis  yours  to  judge,  how  wide   the   limits   stand 
Between  a  splendid  and  a  happy  land. 
Proud  swells  the  tide  with  loads  of  freighted  ore, 
And  shouting  folly  hails   them  from   the   shore. 
Yet  count  our  gains,  this  wealth  is  but   a  name 
That   leaves   the   useful    products   still   the    same 
Not  so  the  loss." 


322  RIGHT  AND  RICHES 

In  other  words,  be  not  carried  away  by  the  delusion  that 
a  large  foreign  trade,  that  high  prices  for  land,  high  rents 
and  rates,  much  building  of  mansions  and  skyscrapers  mean 
plenty.  "Yet  count  our  gains,"  sit  down  and  figure,  "This 
wealth  is  but  a  name."  "Not  so  our  loss."  It  is  but  too 
real.  Visit  the  tenements  of  the  poor.  See  who  is  deprived 
to  provide  these  things.  Look  for  the  coming  panic,  the 
paralysis  that  must  inevitably  follow  this  unhealthy  trade. 

The  beneficiaries  of  privilege  are  skillful  at  misrepresen- 
tation, as  Ruskin  says,  "By  concealing  its  own  fatality  under 
aspects  of  mercantile  complication  and  expediency,  and  giv- 
ing rise  to  multitudes  of  false  theories  based  on  a  mean  be- 
lief in  narrow  and  immediate  appearances  of  good  done  here 
and  there  by  things  which  have  the  universal  and  everlasting 
nature  of  evil." 

In  a  previous  chapter  I  have  pointed  out  the  conditions 
that  place  the  final  limit  on  output.  Output  as  a  whole  is 
not  limited  by  lack  of  capital,  nor  is  employment  of  labor 
limited  by  such  lack,  but  even  were  it  so  limited,  spending 
money  for  luxuries  is  not  applying  it  as  capital.  Output  is 
limited  by  preclusion  of  resources,  to  a  point  below  the  min- 
imum "wage  margin,"  that  is.  by  holders  of  concession  hold- 
ing out  for  a  share  of  the  output  that  leaves  producers  less 
than  they  will  continue  working  for. 

Of  course,  all  holders  of  concession  do  not  hold  out  for 
an  excessive  share,  nor  do  all  producers  decline  to  produce 
but  at  the  margin  this  thing  is  done.  A  price  is  asked  for 
lots  that  builders  or  users  refuse  to  pay ;  railroad  rates  are 
so  high  that  a  certain  product  cannot  be  produced  and  pay 
them;  excessive  rents  cause  merchants  and  farmers  to  fail, 
so  output  is  limited  at  the  base. 

When  concession  holders  raise  their  demands  so  that 
there  is  not  left  of  the  product  enough  for  the  standard  min- 
imum of  wages  and  interest,  production  declines.  This  re- 
bellion is  begun  by  capital,  rather  than  labor.     Owners  of 


WASTE  AND  WANT  323 

capital  say,  'T  can  see  no  profit  to  be  made  by  me,  after 
paying  such  rent  or  rates.  I  shall  sell  my  stock  and  quit;" 
or  they  refuse  to  begin  new  propositions.  This  is  the  limi- 
tation of  the  basis  of  industry,  this  establishes  the  extent  of 
production ;  establishes  how  much  grain  is  grown,  how  much 
ore  is  mined ;  determines  the  volume  of  the  output  at  its 
source. 

Now.  to  divert  a  large  percentage  of  this  determined  vol- 
ume of  grain,  cotton  or  ore  to  purposes  of  waste,  tends  to 
enhance  the  cost  of  the  share  needed  for  essentials.  The 
Czar  of  Russia  wisely  forbids  the  export  of  grain,  to  min- 
imize the  extent  of  famine,  even  though  he  does  little  else 
that  shows  any  economic  wisdom.  By  the  same  reasoning 
the  lumber,  cotton  or  food  products  wasted,  increase  the  dis- 
tress of  the  poor.     Goldsmith  puts  it, 

"Around   the   world   each    needful   product   flies 
For  all  the  luxuries  the  world  supplies." 

So  the  rich  whose  income  is  from  grain  and  whose  con- 
sumption of  it  for  food  is  a  minor  part  of  their  personal  ex- 
penditures, wish  to  have  it  high  priced  so  it  may  purchase, 
when  exported,  much  silk  or  wine  or  diamonds.  But  the 
comfort  of  the  masses  demands  abundant  and  cheap  food 
products. 

Of  course,  in  an  intelligent  consideration  of  this  matter  of 
vulgar  waste,  the  question  is  not  whether  it  is  better  for  the 
rich  to  get  their  income  and  bury  it,  or  to  expend  it  for  per- 
sonal luxuries.  That  might  be  debatable,  but  there  is  little 
tendency  for  them  to  do  this.  Any  normal  person  with  an 
annual  income  of  a  million,  will  either  invest  it  again  in  in- 
dustry, or  in  lands,  franchises,  etc.,  with  a  prospect  of  in- 
creased value,  or  in  personal  luxury.  It  is  so  luicommon  as 
not  to  be  worth  considering  for  them  to  habitually  turn  it 
into  cash  and  lock  it  in  a  vault,  or  to  take  it  in  the  form  of 
grain  or  ore  or  lumber  and  store  it  away  indefinitely.     The 


324  RIGHT  AND  RICHES 

question  then  is  between  spending  in  wasteful  luxury  or  re- 
investment. 

Now,  what  are  some  of  the  things  bought  for  personal 
luxury?  It  is  a  pretty  poetical  theory  that  the  "ladies  and 
gentlemen  bountiful"  go  into  the  highways  and  hedges  and 
hire  the  poor  and  destitute  to  provide  these  luxuries,  but  can 
such  employes  make  extravagant  gowns  or  autos,  build  man- 
sions or  do  high-class  catering  ?  No.  The  rich  buy  the  out- 
put from  the  best  in  labor  as  well  as  materials.  But  there 
is  a  phase  of  this  luxury  that  Goldsmith  saw,  even  in  his 
time,  and  it  grows  worse  each  year: 

"The  man  of  wealth  and  pride 
Takes  up  a  space  that  many  poor  supplied; 
Space  for  his  lake,  his    parks'  extended  bounds; 
Space  for  his  horses,  equipage  and  hounds; 
The  robe  that  wraps  his  limbs  in  silken  cloth, 
Has  robbed  the   neighboring   fields   of   half  their  growth." 

The  largest  item  of  extravagance  is  in  land  and  its  basic 
outputs.  Now  in  this  last  is  where  the  great  error  is  made. 
The  employment  of  labor  and  capital,  the  sum  total  of  its 
output  or  product,  is  not  dependent  on  the  owners  of  Wealth 
(real  Wealth  as  defined  in  economics)  nor  on  the  spending 
of  money,  but  on  the  margin  of  opportunity  which  is  left 
open  to  producers.  This  is  determined  by  the  standard  of 
wages  and  interests,  which  producers  demand  and  are  able 
to  enforce.  This  law  determines  the  total  of  the  volume  of 
output,  even  as  the  capacity  of  the  sources  of  water  supply 
determine  how  much  is  available  in  a  district.  Mere  spend- 
ing of  money  with  its  resultant  employment  of  labor  to  main- 
tain the  supply  of  such  things  as  are  bought,  does  not  in- 
crease the  sum  total  of  output. 

But  spenders  of  money — final  purchasers  of  finished 
product — consumers,  determine  in  what  proportion  to 
each  other  various  classes  of  products  shall  be  made. 
To    use   the    words    of    Ruskin    again,    "By    the    way    we 


WASTE  AND  WANT  325 

spend  it  (money  or  wealth)  we  entirely  direct  the  labor 
of  these  people  during  a  given  time."  Or  more  cor- 
rectly, we  direct  the  application  or  proportion  applied  to 
each  of  various  lines,  of  an  otherwise  determined  volume  of 
producing  capacity,  limited  as  we  have  seen  by  the  laws  of 
wages  and  Preclusion.  Continuing  he  says,  "We  become 
masters  or  mistresses  and  compel  them  to  produce  within 
certain  periods  a  certain  article.  Now  that  article  may  be 
a  useful  and  lasting  one,  or  it  may  be  a  useless  and  perish- 
able one — it  may  be  useful  to  the  whole  community  or  use- 
ful only  to  ourselves.  And  our  selfishness  and  folly  or  our 
virtue  and  prudence  are  shown,  not  by  our  spending  money, 
but  by  our  spending  it  for  the  wrong  or  the  right  thing,  and 
we  are  wise  and  kind;  not  in  maintaining  a  certain  number 
of  people  for  a  given  period,  but  only  in  requiring  them  to 
produce  during  that  period  the  kind  of  things  which  shall 
be  useful  to  society,  instead  of  those  which  are  only  useful 
to  ourselves." 

Our  Sunday  papers  a  while  ago  gave  us  a  story  of  a 
New  York  millionaire's  daughter  who  considered  herself  a 
great  benefactress  because  she  expended  $100,000  annually 
in  dress.  She  boasted  of  working  1,000  women  making  her 
gowns.  Think  of  it,  one  thousand  women,  toiling,  strug- 
gling in  pent-up  tenements ;  their  babies  neglected  and  their 
own  household  duties  left  undone,  all  to  provide  clothes  for 
the  back  of  one  useless,  idle  woman !  Yet  she  asks :  "What 
can  I  do  better  with  my  money  ?" 

Indeed,  what  can  a  vain,  thoughtless,  idle  woman  do 
with  half  a  million  or  more  a  year?  It  is  indeed  a  problem. 
But  no  harder  to  answer  than  the  question,  "What  right 
has  a  vain,  idle,  thoughtless  woman  to  have  so  much  wealth 
come  into  her  hands  each  year?"  Let  not  the  reader  think 
that  the  expenditure  of  money  is  hereby  condemned.  Wealth 
is  only  for  use.    But  one  should  distinguish  what  is  the  best 


326  RIGHT  AND  RICHES 

use,  and  should  not  be  blinded  by  false  theories  when  making 
such  distinction.     Ruskin  says : 

"I  don't  say  you  ought  not  sometimes  to  think  of  your- 
selves— only  do  not  confuse  'vanity'  with  benevolence  nor 
cheat  yourselves  into  thinking  that  all  your  finery  is  so  much 
put  into  the  hungry  mouths  of  those  beneath  you ;  it  is  not 
so;  it  is  what  you  yourselves,  whether  you  will  or  no,  must 
sometimes  instinctively  feel  it  to  be,  that  so  much  has  been 
taken  out  of  their  mouths," 

If  we  perceive  the  scientific  fact,  demonstrated  in  the 
chapter  "The  Domain  of  Use,"  that  the  whole  volume  of  the 
output  of  wealth  is  fixed  by  the  extent  of  such  Domain; 
that  the  supply  of  capital  put  into  industry  is  always  as 
much  as  these  "rates"  will  allow  to  have  a  reasonable  in- 
crease ;  and  that  currency  circulates  in  response  to  the 
volume  of  output,  then  we  may  clearly  see  that  whatever 
absorbs  part  of  this  determined  output,  without  satisfy- 
ing wholesome  need,  must  inevitably  cause  some  to  suffer 
lack.  It  is  simply  a  proposition  of  subtraction.  What,  then, 
is  the  distinction  between  a  proper  use  of  one's  income  and 
the  dissipation  of  it  in  criminal  extravagance?  It  is  largely 
to  be  decided  by  one's  own  conscience,  but  a  little  considera- 
tion may  help  to  an  intelligent  decision.     Epictetus  said : 

"What  you  avoid  suffering,  do  not  attempt  to  make 
others  suffer.  You  avoid  slavery;  take  care  that  others  are 
not  your  slaves.  For  if  you  endure  to  have  a  slave,  you  ap- 
pear to  be  a  slave  yourself  first.  For  vice  has  no  community 
with  virtue,  nor  freedom  with  slavery." 

The  first  question  to  decide  is  what  moral  right  we 
have  in  the  income  which  the  "rules  of  the  game  of  trade" 
have  thrown  into  our  possession,  for  legal  title  is  not  essen- 
tially moral  title.  A  certain  person  when  asked  to  pay  a 
debt,  said  that  the  statute  of  limitations  had  relieved  him  of 
liability  for  it.  He  was  told  that  there  was  no  statute  which 
hindered  one  from  discharging  an  honest  debt.  Just  so,  there 


WASTE  AND  WANT  327 

is  no  law  to  prevent  one  from  rectifying-  the  receipt  of  gains, 
which  are  legal,  but  unmerited. 

First  then,  we  should  study  the  source  of  our  income, 
whether  it  be  just;  does  it  come  from  excessive  charges? 
Does  it  come  from  hindering  instead  of  promoting  industry? 
Then  we 'should  be  careful  to  discriminate  in  expenditures 
for  our  personal  satisfaction,  between  what  is  really  excel- 
lent and  what  is  merely  display;  between  what  has  real  art- 
istic merit  and  dignity  of  form  and  color,  and  what  simply 
has  the  form  of  the  dollar  mark,  and  the  glitter  of  gold. 

It  is  said  by  a  critic  of  architecture  that  the  mansions 
of  the  Russians  excel  the  modern  mansions  of  any  other 
land,  in  both  their  size  and  the  extravagance  of  their  inter- 
iors. Is  not  this  fact  consistent  with  the  universal  motive 
of  extravagance?  In  proportion  to  the  depressing  and  en- 
slaving methods  by  which  income  is  wrung  from  toilers,  such 
is  the  extent  of  its  flaunting  in  the  faces  of  those  who  are 
oppressed.  This  taunting  impudence  reached  its  limit  when 
the  French  Revolution  burst  forth  to  rebuke  it. 

"O,  luxury!  thou  curst  by  Heaven's  decree, 

How  do  thy  potions,  with  insidious  joy, 
Dififuse   their  pleasures   only  to   destroy! 

Kingdoms  by  thee,  to  sickly  greatness  grown, 
Boast  of  a  florid  vigor  not  their  own: 

At   every  draught  more   large  and   large  they  grow, 
A  bloated  mass  of  rank  unwieldy  woe; 

Till,  sapped  their  strength,  and  every  part  unsound, 
Down,  down  they  sink,  and  spread  a  ruin  round." 

— Goldsmith. 

To  accumulate  wealth,  to  be  surrounded  by  what  is  ex- 
cellent in  architecture  and  art  is  commendable ;  but  first  look 
to  the  moral  Tightness  of  your  revenues,  and  even  though  it 
be  beyond  criticism,  do  not  think  that  you  have  still  no  obli- 
gation to  society  in  its  expenditure;  this  wealth  is  only  rela- 
tively yours. 

21— 


S38  RIGHT  AND  RICHES 

How  can  you  best  meet  this  obligation?  That  is  your 
problem.  To  give  it  away  to  the  individual  poor  is  not  al- 
ways well.  Your  business  may  offer  the  best  opportunity. 
Do  you  own  lands,  or  franchised  industries?  Perhaps  you 
can  serve  your  fellow-man  best  by  using  your  wealth  to  pro- 
mote the  greatest  possible  output  therefrom  in  quality  and 
quantity.  Or  by  developing  the  highest  standards  of  excel- 
lence in  the  sanitary,  moral  and  intellectual  condition  of  your 
employes,  which  may  be  done  by  a  reasonable  investment  of 
your  wealth.  If  your  income  is  from  tenements,  do  the  ten- 
ants get  all  that  is  due  them  ?  He  who  has  the  right  motive 
need  not  be  long  in  finding  investments  in  philanthropy 
which  will  not  only  not  exhaust  themselves,  but  which  will 
increase  in  their  usefulness  as  time  goes  on.  Mr.  Spreckels 
of  San  Francisco  has  made  one  of  the  grandest  of  such  in- 
vestments in  furnishing  funds  to  prosecute  graft. 

To  broaden  the  field  of  effort  by  drainage  and  reclama- 
tion ;  to  support  efforts  to  divert  population  from  big  cities 
to  small  ones  through  better  surroundings,  thus  remedying 
the  awful  results  of  the  greed  which  entices  them  to  such 
cities,  are  suggestions  for  such  use. 

Whatever  conserves  natural  resources  for  the  best  and 
largest  use,  whatever  extends  the  range  of  their  utility, 
broadens  the  field  of  output  and  blesses  all. 

Every  laborer  should  take  an  interest  in  the  greatest  de- 
velopment of  our  natural  resources  and  the  protection  of 
them  from  waste.  Timber,  mineral  and  w^ater  reserves 
should  be  regarded  as  his  capital.  Irrigation,  drainage  and 
reclamation  benefit  all.  Waste  of  public  funds  is  his  injury. 
The  eradication  of  graft  is  labor's  only  hope.  Such  waste 
as  intemperance  in  intoxicants  or  extravagance  of  any  sort 
is  an  injury  to  labor.  Why?  Because  there  is  just  one  pair 
of  hands  to  feed  each  mouth  if  all  work. 

When  the  extravagance  of  the  rich  is  condemned  by  the 
poor  it  will  soon  be  corrected.     Do  not  the  large  majority 


WASTE  AND  WANT  329 

of  the  poor  covet  wealth  for  the  same  purpose?  They  need 
to  learn  the  true  spirit  of  ownership  as  much  as  the  rich. 
They  have  it  in  their  power  to  direct  by  their  votes  the  ex- 
penditure of  public  revenues.  They  should  appreciate  this 
responsibility.  This  one  effort  on  their  part  would  soon 
ameliorate  the  worst  distress.  The  sums  now  expended  on 
navies  would  open  up  vast  resources  if  spent  on  good  roads, 
or  deep  waterways,  or  railroads,  or  drainage.  The  land  and 
mineral  resources  the  Federal  Government  allows  to  be 
stolen  would,  if  saved,  yield  revenues  to  transform  our  land. 
Many  think  that  the  employment  of  labor  on  wasteful 
production  and  extravagance  is  good  for  wages.  Do  you 
not  know  that  the  million  dollar  yacht  and  the  locomotive 
to  bring  you  coal  cannot  be  built  with  the  same  labor  or 
material  ? 

Now,  if  the  work  of  a  larger  percentage  of  laborers  is 
diverted  to  serving  the  very  rich  and  the  very  wasteful,  it 
must  leave  the  number  so  much  lessened,  who  provide  the 
food,  clothing,  etc.,  needed  by  the  common  people. 

Hence,  by  the  law  of  supply  and  demand,  it  is  enhanced 
in  price,  is  harder  to  get.  Suppose  that  a  wealthy  class  con- 
stituting but  one  per  cent,  of  the  people  should  hire  ten  per- 
sonal servants  each.  That  would  be  twenty  per  cent,  of  all 
the  labor.  Then  suppose  that  they  should  consume  50  per 
cent,  of  the  goods  produced.  This  would  leave  for  99  per 
cent,  of  the  people  the  product  of  less  than  40  per  cent,  of 
all  workers,  while  this  one  per  cent,  consume  the  service  of 
60  per  cent.  Do  you  suppose  that  the  common  people  could 
live  as  well?  Two  evils  will  surely  result,  long  hours  of 
labor  and  short  rations  to  the  common  people. 

Is  it  any  of  your  business  what  another  consumes  ?  In- 
deed yes.  It  is  the  duty  of  every  worker  especially  to  look 
with  disfavor  on  an  increase  of  the  ranks  of  personal  serv- 
ants. An  increase  of  luxuries  may  come  from  an  increase 
of  scientific  knowledge,  but  an  increase  of  the  number  in 


230  RIGHT  AND  RICHES 

servitude  means  a  decrease  of  the  free  labor  wherewith  to 
supply  our  needs.  What  is  the  trouble  now  in  this  country? 
Immeasurable  increase  of  output  is  accompanied  by  slight 
increase  of  supplies  to  the  masses. 

Where  output  has  been  multiplied  by  ten,  use  by  the 
masses  has  perhaps  not  increased  half.  Where  does  the 
other  more  than  eight-tenths  of  the  increase  go  to?  It  is 
said  by  the  press  that  the  one  room  occupied  by  one  of  our 
millionaire's  daughters  married  to  a  foreign  title,  cost  about 
a  million  dollars  in  decorations  and  furnishings ;  that  her 
servants  were  a  small  army  of  skilled  men  and  women. 

How  many  mansions  are  being  built  that  cannot  be  cared 
for  by  less  than  ten  or  a  dozen  servants?  What  is  that  to 
us?  Simply  that  it  decreases  the  number  engaged  in  pro- 
duction of  those  things  needed  by  all,  causing  corresponding 
increase  of  price.  Also  it  increases  the  probability  that  our 
children  shall  be  servants.  For  remember  that  servants  are 
not  made  of  wood  or  iron,  but  consist  of  men  and  women. 
There  is  too  much  seeking  of  wealth  from  sordid  motives. 

We  must  learn  the  true  consistence  of  zvealth  and  that 
its  enjoyment  is  not  through  the  domination  of  others  but 
through  its  wholesome  diffusion.  How  many,  after  strenu- 
ously acquiring  a  profusion  of  property  fail  to  enjoy  it  as 
they  had  expected  they  should. 

"The  ground  of  a  certain  rich  man  brought  forth  plen- 
tifully and  he  said  *  *  *  I  will  tear  down  my  barns  and 
build  greater  and  there  will  I  bestow  my  fruits  and  my 
goods,  and  I  will  say  unto  my  soul  (sensuous  desires)  :  "Soul, 
thou  hast  much  goods  laid  up  for  many  years ;  take  thine 
ease,  eat,  drink,  and  be  merry.'  But  God  said  unto  him, 
'Thou  fool,  this  night  thy  soul  (sensuous  appetite  or  desire) 
shall  be  required  of  thee.'  "  "What  shall  a  man  give  in  ex- 
change for  his  soul  ?"  How  can  one  buy  the  appetite  to  get 
pleasure  out  of  things  which  no  longer  please? 


WASTE  AND  WANT  331 

Why  do  those  becoming  rich  often  find  no  pleasure  in 
any  of  the  things  they  had  in  view  when  striving  for  their 
riches?  Because  their  motives  were  wrong  while  they  were 
accumulating  such  things.  Truly,  "a  man's  life  consisteth 
not  in  the  abundance  of  his  possessions." 

But  "the  slothful  man  is  brother  to  him  that  wasteth." 

The  efifect  of  this  law  does  not  depend  on  the  quantity  of 
wealth  but  how  it  is  used.  He  who  had  one  talent  which  he 
devoted  entirely  to  self  was  condemned,  while  he  who  had 
five  and  put  them  cut  at  interest,  or  useful  service,  was 
blessed  with  larger  means  of  usefulness.  It  is  the  duty  of 
those  possessed  of  much  property  to  devote  it  and  the  op- 
portunities thereby  afforded  to  the  service  of  humanity,  and 
it  is  no  less  the  duty  of  those  without  property  to  devote 
their  efforts  to  unselfish  service,  and  such  devotion  is  usual- 
ly rewarded  with  increasing  supply  of  wealth. 


CHAPTER  II. 

Governmental  Reform  and  Individual  Opportunity. 

"And  the  government  shall  be  upon  his  shoulders: 
Of  the  increase  of  his  government  and  peace  there 
shall  be  no  end."  — Isaiah. 

"And  a  King  shall  reign  and  prosper  and  shall 
execute  judgment  and  justice  in  the  earth  *  *  *  and 
this  shall  be  His  name  whereby  he  shall  be  called  The 
Lord  Our  Righteousness."  — Jeremiah. 

NE  of  the  disciples  on  the  way  to  Emmaus  after 
Jesus'  crucifixion  despondently  declared :  "But  we 
trusted  that  it  had  been  He  which  should  have  re- 
deemed Israel."  The  Jews,  even  the  disciples, 
misunderstanding  prophecy,  expected  Jesus  to  redeem  them 
from  the  Roman  power.  Just  before  his  ascension  they 
asked  Him :  "Wilt  thou  at  this  time  restore  again  the  King- 
dom to  Israel?" 

People  commonly  expect  all  reform  to  be  brought  by  some 
"man  on  horseback,"  dealing  destruction  to  those  whom  they 
think  to  be  their  oppressors.  Jesus  strove  to  remove  this 
mistake  from  his  hearers'  minds  by  telling  them  "The  King- 
dom of  Heaven  cometh  not  with  observation,"  "The  King- 
dom of  Heaven  is  within  you."  "We  wrestle  not  with  flesh 
and  blood,  but  with  ihe  powers  of  darkness." 

Reforms  come  not  down  from  organized  authority,  but 
proceed  from  the  improvement  of  the  dominant  thought  of 
the  people  up  to  the  constituted  authority.  As  Markham 
sublimely  voices  it, 

"Nay  for  He  comes  to  loosen  and  unbind, 
To  build  the  lofty  purpose  in  the  mind." 

Then  what  object  does  it  serve  to  learn  the  principles  of 
economics?     Does  it  do  any  good  for  people  to  learn  how 

332 


GOVERNMENT  AND  OPPORTUNITY         333 

they  are  being  deprived  of  the  results  of  their  labor?  How 
their  public  officers  are  misrepresenting  them?  That  courts 
are  prejudiced  by  predatory  interests? 

It  does  much  good;  for  error  subjected  to  the  light  is 
powerless  and  truth  understood  will  prevail.  A  public  opin- 
ion based  on  science,  on  a  knowledge  of  the  truth,  will  cor- 
rect public  errors. 

Is  the  inauguration  of  such  reforms  as  Public  Owner- 
ship, Initiative  and  Referendum,  etc.,  essential  to  the  cor- 
rection of  public  abuses? 

Yes  and  no.  They  are  important  because  they  represent 
the  crystallization  of  the  better  thought,  but  statutory  en- 
actments are  not  the  goal  of  reform  movements.  Statutes 
depend  for  their  effectiveness  upon  the  people,  upon  having 
the  eternal  laws  of  truth  "written  in  the  people's  hearts ;" 
upon  an  understanding  of  zvhat  is  right,  and  why  it  is  right. 
True  popular  government  guaranteeing  liberty  and  justice 
is  attainable  only  through  the  self-government  of  the  indi- 
vidual citizen  and  he  may  only  succeed  in  goj/erning  himself 
by  the  apprehension  and  demonstration  of  the  absolutely 
scientific  divine  principle  of  government,  the  "royal  law  of 
liberty."  Enslavement  is  proportionate  to  the  ignorance  and 
selfishness  and  indifference  of  the  enslaved,  regarding  their 
rights. 

All  law  is  fulfilled  in  one  word :  "Thou  shalt  love  thy 
neighbor  as  thyself."' 

The  conception  of  government  as  something  far  away 
is  happily  beginning  to  give  way  to  a  truer  conception.  We 
must  cease  to  speak  of  government  in  the  third  person ;  gov- 
ernment is  "we" — not  "they."  The  following  extract  from 
a  recently  recovered  ancient  manuscript,  is  said  to  be  the 
words  of  Jesus:  "Strive  therefore  to  know  yourselves  and 
ye  shall  be  aware  that  ye  are  the  sons  of  the  Father,  and  ye 
shall  know  that  ye  are  in  the  City  of  God  and  iliat  ye  are 
the  city."     The  "city"  was  the  common  ancient  expression 


334  RIGHT  AND  RICHES 

for  organized  society.  It  is  beginning  to  be  recognized  that 
the  foundation  of  a  city's  prosperity  is  righteousness  and  not 
dissoluteness. 

Government  is  not  now  so  generally  thought  to  consist 
in  fort  and  navy,  in  policeman's  club  and  grated  cell,  as  for- 
merly. This  is  evidenced  by  the  advance  of  prison  reform, 
juvenile  courts,  paroles  of  prisoners,  and  other  methods 
which  began  with  the  great  step  of  abolition  of  debtors' 
prisons.  A  police  court  in  Chicago  is  giving  a  good  demon- 
stration of  the  superiority  of  "common  sense" — true  sense — 
over  stereotyped  foolishness  in  dealing  with  the  violators  of 
the  law.  This  judge  reasons  with  the  delinquent  ones  as 
man  to  man ;  appeals  to  the  good  in  them,  points  out  the  re- 
sults of  their  mistaken  conduct  irrespective  of  statutes,  and 
with  splendid  results. 

I  hope  to  see  the  day  that  no  disagreement  regarding 
property  or  service  can  come  to  a  farce  comedy  court  trial, 
until  efforts  to  agree  on  the  real  truth  shall  have  been  ex- 
hausted, until  after  both  parties  to  the  contention  shall  have 
submitted  in  writing  his  full  sworn  statement  of  facts  to  the 
arbitration  of  three  of  their  fellow  citizens,  with  only  the 
principals  present,  and  without  witnesses  or  lawyers.  How- 
little  the  law  has  to  do  with  such  matters  as  an  agent's  claim 
for  commission,  an  employe's  claim  for  wages,  an  ordinary 
claim  for  damages  to  property,  or  a  debt  for  the  price  of 
property.  These  matters  almost  solely  rest  on  reason,  and 
to  becloud  them  with  great  volumes  of  legal  opinions  is  in 
itself  a  crime. 

No  better  statement  of  government  can  be  made  than  that 
by  Ruskin.  "Government  is  always  twofold  *  *  *  visible 
and  invisible.  The  visible  government  is  that  which  nomin- 
ally carries  on  the  national  business ;  determines  its  foreign 
relations,  raises  taxes,  levies  soldiers,  fights  battles  or  di- 
rects that  they  be  fought,  and  otherwise  becomes  the  ex- 
ponent of  the  national   fortune.     The  invisible  government 


GOVERNMENT  AND  OPPORTUNITY         335 

is  that  exercised  by  all  energetic  and  intelligent  men,  each 
in  his  sphere,  regulating  the  inner  will  and  secret  ways  of 
the  people,  essentially  forming  its  character,  and  preparing 
its  fate." 

If  property  owners  make  the  laws  and  influence  the 
courts  and  the  press,  does  not  this  statement  conflict  with 
the  one  that  public  opinion  is  all-powerful?  No.  It  con- 
firms it.  This  predatory  class  but  represents  or  embodies  the 
thought  of  the  community.  The  public  is  plundered  by  their 
schemes  of  greed  only  to  the  extent  of  the  public's  greed. 
It  is  greed  in  the  majority  which  tolerates  oppressive  greed 
in  the  few.  St.  Paul  says :  "But  if  ye  bite  and  devour  take 
heed  that  ye  be  not  consumed  one  of  another."  Greed  can- 
not combat  greed. 

Statutory  law,  with  its  whole  machinery  of  courts,  law- 
yers and  common  law  farces,  is  all  a  poor  substitute  for  the 
power  of  a  public  opinion  founded  on  righteousness.  We  do 
not  depend  on  statutes  to-day  to  prevent  chattel  slavery. 
Emerson  tritely  expresses  it,  "The  law  is  only  a  memor- 
andum." 

"Evil  is  not  power."  When,  for  love  of  mankind  and 
love  of  God,  the  light  of  truth  is  thrown  upon  what  are  sup- 
pose^l  to  be  the  impregnable  fortresses  of  evil — as  evil  com- 
binations of  capital,  grafting,  political  corruption,  all  forms 
of  greed — these  herds  of  swinish  forces  are  seen  to  "rush 
violently  down  a  steep  place."  Have  we  not  seen  the  rush 
of  corruptionists  to  panic  and  suicide  in  the  last  few  years  ? 
"Evil  is  not  power."  The  emancipation  of  mankind  does 
not  depend  on  human  legislation.  It  must  be  first  in  the 
hearts  of  the  people  to  get  such  laws,  and  afterward  to  make 
them  effective. 

A  knowledge  among  the  people  of  the  economics  Jesus 
taught,  is  a  better  guarantee  of  peace  than  navies  and  forts ; 
a  better  guarantee  of  justice  than  much  legislation;  a  better 


336  RIGHT  AND  RICHES 

guarantee  of  the  safety  of  property  and  person  than  im- 
mense prisons  and  police  forces. 

Seventeen  men  who  put  aside  selfishness  reformed  Gal- 
veston. One  man  with  honest  patriotic  effort  started  the 
reform  in  Missouri.  Intelligent  patriotism,  civics,  philan- 
thropy, even  true  religion  depends  on  a  knowledge  of  the 
science  of  economics,  for  economics  is  one  of  the  two  phases 
of  religion ;  that  of  our  duty  to  our  fellw  man,  "for  he  that 
loveth  not  his  brother  whom  he  hath  seen,  how  can  he  love 
God  whom  he  hath  not  seen?" 

Says  Governor  Folk  of  Missouri  in  his  Thanksgiving 
Day  Proclamation : 

"Let  us  encourage  industry  and  attack  not  wealth.  Let  us 
fight  not  men  but  the  evil  men  do.  Let  us  love  not  money 
but  manhood.  Let  us  preserve  inviolate  the  principle  of  popu- 
lar self-government;  unite  in  enforcing  the  laws  and  counter- 
acting any  attempt  to  defy  them.  Let  us  realize  that  liberty  to 
make  laws  does  not  mean  license  to  break  them;  that  the 
liberty  guaranteed  us  is  liberty  under  the  law.  not  liberty  against 
the  law.  Let  us  not  array  class  against  class,  but  preserve  the 
rights  of  all  by  causing  each  to  respect  the  rights  of  the  other. 
Let  us  appeal  not  to  cunning  but  to  conscience,  and  remember 
that  by  making  the  public  conscience  clean  the  public  life  is 
made  clean." 

Hate  does  not  promote  liberty.  Happiness  and  plenty 
are  not  guaranteed  by  material  means,  either  by  engines  of 
destruction  or  construction.  Says  Marcus  Aurelius,  the  wise 
pagan  apostle  of  pure  thought:  "Look  within,  for  within  is 
the  fountain  of  life,  and  it  will  ever  bubble  up  if  we  will 
ever  dig."  When  the  Kingdom  of  Heaven  is  attained  it  will 
be  from  within.  The  icy  barriers  of  greed  which  exclude 
humanity  from  its  own,  must  be  bombarded  by  wisdom  and 
melted  by  love.  Love  is  the  opponent  of  aggression.  Ac- 
cording to  Emerson,  "Love  is  the  only  opponent  of  prop- 
erty as  we  now  have  it." 

Says  Dr.  Washington  Gladden  in  the  Congregationalist : 


GOVERNMENT  AND  OPPORTUNITY         337 

"How  great  is  the  need  of  enkindling  in  the  soul  of  the 
nation  a  great  sense  of  the  eternal  realities — of  the  sacredness 
of  truth,  of  the  holiness  of  justice,  of  the  nobility  of  service, 
of  the  divineness  of  humanity!  O,  can  you  not  see — you  states- 
men— you  publicists — you  political  philosophers — that  the  one 
vital  need  of  this  nation,  at  this  hour,  is  the  presence  in  the 
hearts  of  the  people  of  that  friendliness  for  one  another  which 
is  the  soul  of  justice  and  the  only  bond  that  can  hold  men 
together  in  fruitful  relations?  To  fill  human  society  with  this 
great  friendliness — this  is  the  business  of  the  Christian  Church. 
This  is  what  we  mean  when  we  pray.  'Thy  Kingdom  come, 
Thy  will  be  done  on  earth,  as  it  is  in  Heaven.'  " 

The  comparative  prosperity  of  two  peoples  is  commen- 
surate with  the  degree  of  their  real  Christian  character,  and 
is  manifested  in  charitable  and  elevating  works.  The  meas- 
ure of  this  true  civilization  is  indicated  by  their  treatment 
of  woman.  Have  you  never  known  a  man  to  complain  bit- 
terly of  his  poor  fortunes  or  the  long  hours  some  enslaving 
employers  compel  their  men  to  work,  while  yet  he  would 
himself  sit  idly  by  and  compel  his  wife,  whom  he  professed 
to  love,  to  work  fifteen  hotirs  a  day  for  him  and  his  children 
without  raising  a  hand  to  help  her?  Is  it  to  be  wondered 
at  that  such  men  are  poor?  The  more  savage  the  man,  the 
more  his  selfishness  is  manifested  in  overbearing  force.  Who 
gave  man  and  not  women  the  right  to  vote?  One  of  our 
greatest  living  statesmen  has  pointed  out  the  excellence  of 
Christian  ideals  over  Oriental  ideals,  to  be  the  infinite  super- 
iority of  Love,  the  vital  force  of  Christianity,  over  reciproc- 
ity, the  lifeless  rule  of  the  Oriental  religion.  Reciprocity 
does  nothing  without  pay;  Love  thinks  not  of  the  pay  but 
of  the  blessing  it  may  impart  and  finds  it  "more  blessed  to 
give  than  receive."  This  is  obvious  in  the  more  bountiful 
wealth  of  the  Christian  community,  for  is  it  not  self-evident 
that  giving  adds  to  the  sum  of  wealth  while  taking  decreases 
it.  In  the  degree  that  man  discovers  Love,  God,  he  finds 
abundance,  for  "God  is  all."  Christian  lands  are  free  from 
famines,  which  almost  depopulate  un-Christian  nations. 


338  RIGHT  AND  RICHES 

Are  they  who  suffer  from  poverty,  then,  morally  or  men- 
tally inferior  to  those  who  enjoy  affluence?  This  is  not  im- 
plied at  all,  for  the  grandest  characters  we  know  may  be  des- 
titute of  property,  while  those  of  greatest  possessions  may 
exhibit  the  meanest  dispositions.  Yet  notwithstanding  these 
apparent  inconsistencies,  it  remains  an  uncontrovertible 
truth  that  poverty  is  an  unnatural  and  deplorable  error  that 
we  should  earnestly,  carefully  and  prayerfully  strive  to  over- 
come. But  we  should  be  sure  that  in  this  effort  to  overcome 
poverty  we  proceed  from  true  principles. 

It  is  not  enough  that  the  pupil  have  the  right  answer 
attached  to  his  methematical  problem.  He  must  have  at- 
tained it  by  the  correct  principle,  for  him  to  truly  benefit 
thereby.  Likewise  it  is  no  conclusive  proof  of  progress  in 
the  science  of  business  that  we  get  a  quantity  of  property 
by  indiscriminate  means.  It  is  essential  to  our  ultimate  good 
that  our  supply  come  as  a  result  of  the  demonstration  of 
right  business  principles.  He  who  flatters  himself  on  his 
wonderful  progress  in  the  knowledge  of  business  may  sadly 
need  even  the  advice  of  his  indigent  brother,  regarding  the 
true  solution  of  this  great  problem.  "He  that  seeth  his 
brother  have  need"  and  has  no  compassion  on  him,  has  cer- 
tainly made  little  progress  in  the  real  science  of  success,  no 
more  has  he  who  is  unkind  to  his  own  family. 

It  is  important  to  have  an  accurate  statement  of  the  re- 
lations and  laws  of  wealth  and  production.  It  is  very  im- 
portant to  have  legislation  based  on  these  natural  and  un- 
changing laws,  but  most  of  all  to  learn  that  "Love  is  the 
fulfilling  of  the  law."  Evolution  of  good  government,  of 
intelligent  commerce,  of  all  social  progress  is  not  the  crea- 
tion of  something  new,  but  the  recognition  of  principles  that 
were  ever  operative.  This  is  true  of  mechanics  and  industry, 
just  as  it  is  true  of  the  so-called  evolution  of  man.  Steam, 
chemistry,  and  the  principles  of  engineering  are  not  new. 
Man  was  made  perfect,  in  the  image  of  God.    The  Prophet 


GOVERNMENT  AND  OPPORTUNITY         339 

Isaiah  thousands  of  years  ago  saw  a  perfect  social  status 
based  on  right  or  righteousness. 

Considerable  economic  writing  of  late  has  been  a  vague 
presentation  of  a  strange,  mysterious  god  termed  "social 
love,"  social  evolution,  whose  "worship"  is  labor.  These 
teachers  point  to  the  widening  field  of  industry,  the  growing 
interdependence  between  people  of  the  most  remote  corners 
of  the  earth.  They  also  note  the  growing  fraternity,  peace  and 
good  will  among  men,  and  attribute  them  to  the  effects  of 
this  "social  god,"  a  god  of  blind  energy  expressed  in  work. 

To  such  teachers  let  us  repeat  the  words  uttered  by  Paul 
in  that  grand  outburst  of  eloquence  on  Alars  Hill :  "Ye  men 
of  Athens,  I  see  that  in  all  things  ye  are  too  superstitious, 
for  as  I  passed  by  and  beheld  your  devotions  I  found  an 
altar  with  this  inscription,  'TO  THE  UNKNOWN  GOD.' 
Whom  therefore  ye  ignorantly  worship,  Him  declare  I  unto 
you.  God  that  made  the  world  and  all  things  therein,  seeing 
that  He  is  Lord  of  Heaven  and  earth,  dwelleth  not  in  tem- 
ples made  with  hands ;  neither  is  zvorskipcd  zvith  men's 
hands  as  though  He  needed  anything,  seeing  He  givetli  to  all 
life,  and  breath,  and  all  things ;  and  hath  made  of  one  blood 
all  nations  of  men." 

It  is  not  extension  of  the  field  of  exchange  that  is  pro- 
moting the  brotherhood  of  man ;  but  it  is  the  extension  of 
brotherhood  through  the  teachings  of  Him  who  came  to 
bring  "peace  on  earth"  that  is  making  exchange  world-wide. 

Isaiah  foresaw  the  time  to  come  "that  the  mountains  of 
the  Lord's  House  shall  be  established  in  the  top  of  the 
mountains,  and  shall  be  exalted  above  the  hills ;  and  all  na- 
tions shall  flow  unto  it.  For  out  of  Zion  shall  go  forth  the 
law  and  the  word  of  the  Lord  from  Jerusalem,  and  he  shall 
judge  among  the  nations  and  shall  rebuke  many  peoples ; 
and  they  shall  beat  their  swords  into  plowshares,  and  their 
spears  into  pruning  hooks,  nation  shall  not  life  up  sword 
against  nation,  neither  shall  they  learn  war  any  more." 


S40  RIGHT  AND  RICHES 

The  recognition  of  God  as  our  Father  makes  us  all  one 
family ;  it  destroys  race  hatred  and  false  national  "interests." 

Love  certainly  prompts  activity  and  useful  effort,  but 
there  is  no  tendency  in  indiscriminate  work  to  elevate  the 
worker,  rather  a  tendency  in  much  of  it  to  degrade. 

We  must  learn  both  what  right  is,  and  what  riches  are. 
Riches,  wealth',  is  not  simply  tons  or  pounds  of  freight.  The 
word  wealth  is  from  weal  or  zvcll.  Its  primary  meaning  as 
given  by  the  Century  Dictionary  is  prosperity,  well-being,  joy 
and  happiness.  To  confine  the  use  of  the  word  more  to  mater- 
ial wares  is  a  later  tendency.  Wares  are  only  wealth  in  the  de- 
gree that  they  promote  well-being.  Wares  of  great  value  to 
one  advanced  in  civilization  would  often  times  be  of  no  use 
to  one  lower  in  the  scale,  and  vice  versa.  Many  philan- 
thropists have  been  discouraged  because  those  whom  they 
sought  to  help  failed  to  use  what  was  offered  them.  To  a 
refined  person,  the  lack  of  a  bathroom  in  a  house  would 
seem  a  great  privation,  yet  tenants  have  been  known  to  use 
nice  enameled  bathtubs  only  as  a  storage  for  ashes.  Wares 
are  not  happiness.  Happiness  is  limited  by  them  only  ac- 
cording to  our  mental  estimates.  Some  think  tobacco  and 
intoxicants  wealth ;  many  others  think  them  what  Ruskin 
terms  "illth." 

Current  economics  tend  too  much  to  a  material  concep- 
tion of  wealth.  The  conception  of  needful  things  as  "prop- 
erty," an  entity  whose  basis  is  hindrance  to  use,  is  the  an- 
tithesis of  the  true  idea  of  such  things  conveyed  by  the  term 
"goods."  "Goods"  or  "good"  consists  in  the  effectual  ex- 
pression of  a  benign  motive  to  minister  to  need.  This  is 
the  ideal  conception,  this  fulfills  the  golden  rule:  Whatso- 
ever yc  would  that  men  should  do  to  you,  do  ye  even  so  to 
them,  for  this  is  the  law  and  the  prophets.  The  common 
rule  of  property,  which  is  directly  antagonistic  to  this,  might 
be  rendered :  Take  ye  all  the  traflfic  will  bear,  for  this  is  the 
source  of  corruption  and  depression.     How  harmful  these 


GOVERNMENT  AND  OPPORTUNITY         341 

inverted  notions  are  appears  in  the  dire  effects  of  thinking 
money  to  consist  of  metal,  in  the  tendency  to  give  more  at- 
tention to  taxing  useful  commodities  than  privileges  im- 
mensely more  valuable,  in  the  inordinate  desire  to  acquire 
immense  houses  and  fill  them  with  cumbrous  merchandise, 
in  the  savage  taste  of  some  rich  women  to  have  innumerable 
dresses  at  a  cost  of  fabulous  sums,  and  most  of  their  time 
and  thought.  These  unfortunate  tendencies  are  shown  by 
our  cities  in  sacrificing  all  that  make  them  fit  for  habitation, 
to  blighting,  smoking  factories,  and  in  licensing  nuisances 
for  money;  in  the  poisoning  envy  and  jealousy  of  many 
poor  toward  the  prosperous, 

A  message  was  recently  sent  1,200  miles  without  paper, 
or  ink,  through  air,  instantly.  Steam  was  always  easily 
available,  yet  it  was  not  always  wealth.  Where  formerly  it 
was  thought  essential  that  thousands  of  miles  of  unsightly 
fences,  harboring  obnoxious  weeds,  be  built  to  protect  farm- 
ers' crops,  now  a  simple  word  of  fraternity  and  intelligence 
expressed  in  a  memorandum  called  law,  protects  those  crops. 
Is  not  this  intelligent  word  greater  riches  than  the  fences, 
that  before  had  cost  millions?  Emerson  says,  "They  only 
who  build  on  ideals  build  for  Eternity."  Wealth  arises  not 
so  much  from  muscular  effort,  or  mechanical  energy  as  from 
unselfish  purpose  to  serve,  to  contribute.  Production  is 
more  truly  a  discovering  or  revealing  of  riches  than  a  cre- 
ation of  them.  "Every  good  gift  *  *  *  cometh  down  from 
the  Father  of  lights."     Poverty  is  darkness. 

Do  not  limit  the  success  of  your  undertakings  by  the  toil 
they  involve,  either  as  to  your  recompense  or  the  good  to  be 
done.  Success  is  not  limited  to  the  measure  of  the  toil  en- 
dured even  from  the  ordinary  commercial  standpoint,  for 
those  who  prosper  greatest  do  not  toil  the  hardest,  nor  does 
any  moral  law  measure  your  reward  by  your  toil  but  rather 
by  the  love  you  put  into  your  work.  Toil  is  necessitated  by 
the  number  of  our  mistakes  we  must  correct.     Yet  he  who 


342  RIGHT  AND  RICHES 

labors  not  seldom  makes  much  progress ;  for  we  must  "work 
out  our  own  salvation."  It  takes  work  to  root  the  errors 
out  of  our  thought  sc  that  God  may  work  through  us.  He 
who  has  the  right  motives  in  life  finds  little  time  for  idle- 
ness. But  the  toil  of  many  is  like  struggling  to  pump  the 
water  from  an  excavation  without  first  shutting  out  the  in- 
flow from  the  sea. 

We  must  not  fail  to  do  our  work  because  conditions  seem 
adverse.  "He  that  cbserveth  the  winds  shall  not  sow,  and 
he  that  regardeth  the  clouds  shall  not  reap."  The  success- 
ful man  is  one  that  continues  to  do  his  part  regardless  of 
good  or  bad  times.  "Cast  thy  bread  upon  the  waters  for 
thou  shalt  find  it  after  many  days."  "In  the  morning  sow 
thy  seed  and  in  the  evening  withhold  not  thine  hand."  Some 
persons  never  expect  to  have  anything,  perhaps  because  they 
work  with  the  wrong  motive. 

St.  James  writes :  "Ye  ask  and  receive  not  because  ye  ask 
amiss,"  for  the  purpose  of  consuming  it  in  selfish  indulgence. 

Jesus  emphasized  the  importance  of  motives  to  our  suc- 
cess in  acompHshment  when,  teaching  how  to  pray,  and 
made  His  meaning  unmistakable  by  the  following  illustra- 
tion :  "Which  of  you  shall  have  a  friend  and  shall  go  unto 
him  at  midnight  and  say  unto  him :  'Friend,  lend  me  three 
loaves,  for  a  friend  of  mine  in  his  journey  is  come  to  me 
and  I  have  nothing  to  set  before  him.'  "  Continuing  He 
points  to  the  inevitable  result  of  such  an  appeal ;  that  though 
he  will  not  supply  you  because  you  are  his  friend  yet  be- 
cause of  the  worthy  motive  which  prompts  your  seeking — 
the  desire  to  minister  to  another's  need — he  will  give  you 
as  much  as  you  need. 

What  great  wealth  would  be  secured  to  us  if  we  could 
look  to  the  purpose  of  our  work  rather  than  the  pay. 
Wealth  consists  in  thought  and  action.  You  cannot  give 
"that  which  is  holy  unto  the  dogs,  neither  pearls  to  swine." 
Has  not  improved  machinery  been  burned  by  those  who 


GOVERNMENT  AND  OPPORTUNITY         343 

thought  it  harmful,  and  are  not  all  progressive  ideas  resisted 
by  communities  and  persons  not  yet  ready  for  them  ?  In- 
gratitude both  to  God  and  to  man,  for  what  we  receive  is 
the  principal  cause  of  poverty. 

Many  are  thought  to  be  rich  and  think  themselves  "rich 
and  increased  with  goods"  when  they  are  "wretched  and 
miserable  and  poor  and  blind  and  naked."  Confidence,  hon- 
esty and  brotherliness  are  better  than  expensive  courts  to 
guarantee  justice.  Friendship  and  love  between  nations  is 
better  national  wealth,  than  forts  and  navies. 

Nothing  is  more  evident  than  that  "a.  man's  life  con- 
sisteth  not  in  the  abundance  of  his  possessions." 

It  is  remarkable  how  the  beautiful,  simple,  scientifically 
economic  teachings  of  Jesus  and  the  scriptures  have  been 
misconstrued  by  professing  Christians,  and  made  to  justify 
the  most  infamous  industrial  practices  and  to  condemn  the 
most  worthy  motives  and  acts  in  connection  with  the  pro- 
curing of  wealth ;  and  on  the  other  hand  how  the  economists 
of  high  motive  and  rational  theories  have  condemned  the 
Christian  teachings  as  opposed  to  the  welfare  of  the  honest 
worker.  Christianity  and  economics  are  inseparable ;  at- 
tempt to  divorce  them  and  you  have  neither. 

Religious  teachers  have  persistently  interpreted  scrip- 
tural statements  to  condemn  wealth  as  an  evil  per  se;  then 
again  they  have  justified  slavery  thereby,  and  preached 
submission  to  every  evil  and  oppression.  The  most  plain 
and  sacred  promises  in  regard  to  God's  providence  and 
abundant  supplies  for  all  our  needs,  have  been  nullified  by 
giving  them  a  figurative  meaning,  while  others  have  been 
narrowed  from  a  broad  meaning  to  one  of  narrow  and  mean 
import.  The  passage  "It  is  more  blessed  to  give  than  to 
receive,"  and  "The  Lord  loveth  a  cheerful  giver,"  are  almost 
stripped  of  meaning  when  construed  to  imply  only  the  con- 
tribution to  church   funds,  or   for  that  matter,  when  such 

22— 


344  RIGHT  AND  RICHES 

giving  does  not  include  the  giving  of  kindly  service  which 
is  possible  to  all.  It  is  only  necessary  to  read  the  beauti- 
ful precepts  and  principles  stated  by  Jesus  and  His 
disciples,  and  the  Prophet  Isaiah  particularly,  and  to  take 
the  meaning  of  their  words  given  by  Webster's  Dictionary 
to  have  a  most  beautiful  Science  of  Economics.  Truly, 
much  of  the  scriptures  have  a  double  meaning,  as  have  all 
profound  writings,  but  it  is  as  wrong  to  rob  them  of  their 
literal  meanings,  as  of  their  scriptural.  Take  the  word 
"bread;"  sometimes  spiritual  strength  is  plainly  implied, 
other  times  subsistence,  or  only  food ;  other  times  both  spirit- 
ual and  bodily  subsistence  is  meant. 

In  the  6th  chapter  of  Matthew  we  have  the  grandest 
economic  teaching  ever  given  to  poor,  tired,  worrying  hu- 
manity: "Take  no  thought  for  your  life  what  ye  shall  eat 
or  what  ye  shall  drink ;  nor  yet  for  your  body  what  ye  shall 
put  on."  There  can  be  no  question  that  literal  subsistence  is 
here  meant;  there  is  no  double  meaning  nor  any  figurative 
meaning.  He  means  just  plainly  what  he  says.  Further  on 
he  says:  "For  your  Father  knoweth  that  ye  have  need  of 
these  things."  It  is  as  one  might  say  to  a  little  boy  at  his 
grandmother's :  "Now,  don't  worry  nor  ask  about  when  you 
are  going  to  have  dinner,  or  what  you  will  have ;  Grandma 
knows  you  haven't  had  your  dinner." 

Is  it  not  as  plainly  a  violation  of  this  command  to  be 
worried  by  poverty,  by  the  lack  of  tlie  wholesome  instru- 
ments of  harmonious  activities  as  it  is  to  be  unduly  strenu- 
ous to  pile  up  wealth?  We  should  no  more  let  the  lack  of 
things  dominate  us  than  we  should  allow  their  possession  to 
hinder  the  true  purpose  of  life. 

Jesus  had  no  accumulation  of  property.  He  had  "not 
where  to  lay  His  head,"  yet  he  was  not  troubled  by  lack  of 
a  boat ;  He  walked  on  the  water ;  nor  for  lack  of  bread  to 
feed  the  multitudes ;  He  got  the  coin  from  the  fish's  mouth 
to  pay  the  tax  to  Caesar  which  he  declared  to  be  unjust." 


GOVERNMENT  AND  OPPORTUNITY         345 

Then  Jesus  makes  the  one  grand  vital  statement  of  all 
true  economics :  ''Seek  ye  first  the  Kingdom  of  God  and  His 
righteousness  and  all  these  things  shall  be  added  unto  you." 
Manifestly  there  is  no  meaning  to  this  when  we  construe 
"seeking  the  Kingdom  of  God"  to  mean  only  a  place  to  go  to 
after  we  are  dead,  for  how  could  food  and  clothing  be  added 
to  our  bodies  after  we  are  dead?  This  is  not  a  bargain  to 
"pay"  food  and  clothing  in  return  for  believing  something 
or  doing  something.  It  is  rather  a  scientific  proposition ; 
just  as  a  teacher  would  say  to  a  pupil:  "Take  a  base  of  8, 
a  perpendicular  of  6,  and  a  hypotenuse  of  10,  and  you  will 
have  a  perfect  right  angled  triangle."  Henry  Drummond 
rightly  teaches  that  the  Kingdom  of  God  is  a  kingdom  of 
cause  and  effect.  He  says  science  must  include  the  infallible 
spiritual  laws.  Right  not  simply  secures  riches.  Right  is 
riches,  true  riches,  but  not  property. 

Because  Jesus  and  His  disciples  refused  to  counsel  the 
suppression  of  certain  evils  by  violence,  their  words  have 
been  construed  by  some  to  justify  such  evils.  Paul  says : 
"Servants  be  obedient  to  your  masters  according  to  the  flesh 
*  *  *  not  with  eye  service,  as  manpleasers,  but  as  the  serv- 
ants of  Christ  doing  the  will  of  God  from  the  heart."  This 
has  been  construed  to  uphold  slavery,  though  nothing  could 
be  farther  from  the  truth.  When  Jesus  was  asked  to  inter- 
fere in  the  settling  of  an  estate  by  one  who  thought  he  was 
not  getting  his  fair  share.  He  asked:  "Man,  who  made  me 
a  judge  or  a  divider  over  you?  And  He  said  unto  them 
take  heed  and  beware  of  covetousness ;  for  a  man's  life  con- 
sisteth  not  in  the  abundance  of  the  things  that  he  possesseth." 
While  Jesus  was  the  greatest  economist,  His  mission  was  not 
to  introduce  reform  in  legislative  measures,  not  to  right 
abuses  by  force,  but  to  teach  men  truth  and  love,  which 
would  of  its  very  nature  make  them  free.  Isaiah  prophesied 
of  Him :  "He  shall  not  strive  nor  cry,  neither  shall  any  man 
hear  His  voice  in  the  street;  He  shall  bring  forth  judg- 


346  RIGHT  AND  RICHES 

ment  unto  truth,  He  shall  not  fail  nor  be  discouraged  till 
He  have  set  judgment  in  the  earth." 

Most  economic  writing  is  too  much  discouraged  and  dis- 
couraging, but  it  cannot  be  otherwise  when  it  looks  only  to 
human  legislation  for  relief. 

Jesus  did  not  decry  the  production  and  use  of  wealth. 
He  warned  against  its  hoarding  and  its  worship.  How 
many  find  "when  they  have  much  goods  laid  up  for  many 
years"  that  they  have  no  soul  or  sense  of  enjoyment  of  them. 
"Lay  not  up  for  yourselves  treasures  upon  earth  where  moth 
and  rust  doth  corrupt,  and  where  thieves  break  through  and 
steal."  But  lay  up  treasures  in  heaven — harmony,  righteous- 
ness, right  thinking,  understanding,  the  satisfaction  of  good 
done. 

The  old  Scotchman  who,  after  he  had  become  a  bank- 
rupt, was  reproached  with  having  been  too  liberal  with  his 
benefactions  replied:  "Ah,  that  is  the  only  part  of  my  for- 
tune I  have  left;  I  can't  lose  that." 

Waste  must  not  be  confused  with  liberality.  "The  vile 
person  shall  no  more  be  called  liberal,  nor  the  churl  said  to 
be  bountiful.  The  liberal  deviseth  liberal  things,  and  by  lib- 
eral things  shall  he  3tand."  It  is  common  to  hear  the  giving 
of  public  wealth  embraced  in  franchises,  to  rich  corporations, 
endorsed  by  the  same  persons  who  urge  the  poor  to  be  sat- 
isfied with  their  meagre  supply. 

Wealth  is  wealth  as  light  is  light  only  when  it  is  diffused. 
Nature  abhors  the  storing  up  of  wealth.  How  few  things 
can  we  heap  up  without  they  decay.  "Take  therefore  no 
thought  for  the  morrow."  He  said  to  pray  "give  us  this  day 
our  daily  bread;"  in  other  words,  replace  anxiety  with  love, 
for  "perfect  love  casteth  out  fear."  "Cease  to  do  evil,  learn 
to  do  well;  seek  judgment;  relieve  the  oppressed  *  *  *  if 
ye  be  willing  and  obedient,  ye  shall  eat  the  good  of  the  land." 
Righteousness  tends  to  the  flow  of  prosperity,  just  as  a 
straight  channel  tends  to  a  rapid  flow  of  water.     Is  it  not 


GOVERNMENT  AND  OPPORTUNITY         347 

obvious  that  the  promotion  of  dishonest  schemes  is  what 
destroys  the  confidence  of  investors  which  is  the  life  of 
business.  The  savage  depends  on  brute  force  for  subsist- 
ence, but  men  of  the  higher  order  depend  for  their  sup- 
ply on  right  thinking  back  of  their  efforts. 

It  may  not  be  at  once  apparent  to  the  man  with  whom 
all  seems  to  have  gone  wrong,  how  he  may  be  enabled 
to  supply  his  needs  through  the  use  of  correct  principles 
and  perfect  ideals.  We  have  become  educated  to  believe 
that  such  supply  depends  on  some  intensely  material 
process  and  then  strangelv  enough  make  this  process 
dependent  on  getting  a  vague  metaphvsical  entitv  called 
money,  which  to  the  common  thought  is  an  infinite 
power  from  a  mysterious  source. 

Is  not  business  more  entirelv  a  mental  and  moral 
process  than  we  are  wont  to  think? 

By  what  rule  shall  we  attempt  to  measure  business  suc- 
cess ;  surely  not  by  muscular  strength,  scholarlv  attain- 
ment, nor  years  of  practice.  Does  it  not  absolutelv  de- 
pend on  our  relations  with  nature  and  with  our  fellow- 
man,  and  do  not  such  relations  depend  on  right  princi- 
ples? Do  not  moral,  mental  or  spiritual  forces,  rather 
than  material,  inspire  public  confidence  in  a  person  or 
give  him  faith,  judgenment  forsight  or  skill ;  give  him 
power  to  overcome  fear,  hate,  suspicion,  greed  and  de- 
ceit, which  disturb  his  business  relations  and  weaken 
his  efforts  in  all  directions. 

How  important  then  that  we  have  definite  dependable 
principles  as  a  basis  for  our  rules  of  business.  This  is 
coming  to  be  appreciated  as  never  before  as  was  well 
expressed  in  the  following  extract  from  a  recent  issue  of 
The  Outlook. 

"Ma.ny  neople  are  so  confused  by  the  flotsam  and  jetsam  on 
the  surface  of  the  great  political  and  economic  movement  which 
now  absorbs  the  interest  of  the  country  that  they  fail  to  discern 
its  fundamental  and  intensely  ethical  spirit.  When  the  incidents 
a.nd  accidents,  the  foam  and  froth,  tJie  invective  of  the  dema- 
gogue and  the  anathemas  of  those  who  are  defending  what  they 
believe  to  be  their  private  interests,  are  put  out  of  the  way,  it 


348  RIGHT  AND  RICHES 

grows  more  clear  every  month  that  we  are  in  the  heart  of  a 
great  moral  movement  as  significant  as  any  that  has  taken  place 
in  the  history  of  the  country.  This  movement  has  not  come  in 
a  day.  It  is  not  a  mere  revolt  against  the  oppressive  economic 
conditions,  nor  is  it  simply  an  insurrection  against  political 
bosses  and  robbery.  It  is  a  quickening  of  the  conscience  of  the 
people,  and  an  attempt  sometimes  instinctive,  often  blind,  but 
with  a  great  wisdom  at  the  bottom  of  it,  to  bring  the  business 
and  social  life  of  the  country  into  harmony  with  moral  ideals. 
The  churches  have  had  much  to  do  with  this  movement,  but  not 
nearly  as  much  as  they  ought  to  have  had.  They  have  not  led 
it.  At  the  first  glance  it  appears  to  have  grown  up  very  largely 
outside  their  walls." 

Business  is  commonly  spoken  of  by  religious  teachers 
as  though  it  were  something-  to  be  avoided  by  Christians, 
as  something  closely  allied  to  outlawry.  But  this  is  due 
to  a  mistaken  notion  of  business,  to  that  common  con- 
ception of  it  whicli  has  greed  and  aggression  as  its  domi- 
nant forces.     True  business  is  a  holy  occupation. 

Our  business  should  be  our  best  and  widest  field  for 
demonstrating  God's  kingdom.  This  was  St.  Paul's 
thought  when  he  wrote  'T  beseech  you  that  you  walk 
worthy  of  the  vocation  wherein  ye  are  called." 

It  is  commonly  held  that  Christianty  is  a  handicap  to 
a  man's  business,  but  such  reasoning  mistakes  what  busi- 
ness means.  The  scriptures  not  only  do  not  condemn,  but 
they  do  enjoin  industry  and  thrift.  They  do'  not  condemn 
having  wealth,  but  the  love  of  it.  and  the  wrong  motive  in 
acquirement  and  use.  Jesus  surelv  did  teach  the  inade- 
quacy of  propertv  as  a  source  of  satisfaction ;  yet  He  said 
"Your  Father  knoweth  that  ye  have  need  of  such  things." 
Jesus  as  surely  taught  the  overcoming  of  poverty  as  that 
of  sin.  He  fed  the  multitudes ;  He  directed  the  casting 
of  the  net  for  a  large  catch ;  He  sent  them  forth  to  heal 
without  purse  or  scrip. 

The  greatest  lack  of  humanitv  to-day.  and  what  is  most 
discouraging,  is  the  lack  of  an  ultimte  purpose  in  life; 
lack  of  desire  which,  when  supplied  will  truly  give  satis- 
faction. Material  wealth  or  physical  well-being  is  not 
the  ultimate  of  Tesus'  teachings.  He  asked.  "Is  not  life 
more  than  meat^" 


GOVERNMENT  AND  OPPORTUNITY         349 

"Making  money"  is  not  a  worthy  life  motive.  It  can- 
not bring  happiness  even  if  seemingly  successful.  We 
hold  too  narrow  views  of  life.  If  our  pursuits  do  not 
tend  to  broaden  our  character  and  brinsr  us  into  greater 
harmony  with  those  with  whom  we  deal,  then  they  are 
conducted  on  wrong  principles. 

The  command  "Thou  shalt  love  thy  neig-hbor  as  thy- 
self," in  its  fullness  means  the  ultimate  elimination  of 
private  property,  for  when  we  do  love  our  neighbor  as 
ourself  we  cannot  then  wish  to  hinder  or  deprive  him  of 
what  is  good.     It  means  Christian  socialism. 

All  Christian  principles  of  brotherhood,  all  true  econ- 
omic science  converge  toward  the  one  perfect  economic 
ideal,  the  complete  elimination  of  hindrance  to  use,  nrhicJi 
is  the  basis  of  private  property. 

Is  this  ideal  too  transcendental?  Then  so  is  everv  ideal 
of  Christianity. 

Truly  its  complete  demonstration  is  bevond  present 
practice.  We  cannot  under  present  conditions  dispense 
with  all  restraint  to  ever3^one's  use  of  the  wealth  we  may 
have  or  j^roduce.  But  \\e  may  now  have  more  and  more 
good  things  free  to  all — public.  But  is  not  the  ideal  of 
every  science  beyond  present  attainment?  The  electrical 
or  mechanical  engineer  is  only  able  to  demonstrate  an 
engine  in  practical  use  with  a  fraction  of  the  efficiency 
of  his  perfect  ideal.  His  ideal  has  an  efficiency  of  one 
hundred  per  cent.  It  is  without  wasteful  processes  and 
without  friction.  So  shall  the  ideal  commerce  dispense 
with  Hindrance  the  great  obstacle  to  plenteous  supplA'. 

No  science  can  succeed  without  a  perfect  ideal.  The 
perfect  ideals  of  Christian  economics  are  love  and  ser- 
vice. But  we  may  not  as  yet  always  give  the  greatest 
service  by  distributing  our  wealth  indiscriminatelv.  This 
would  be  casting  pearls  before  swine.  People  are  not 
ready  for  such  practice.  It  would  most  likely  encourage 
ingratitude,  beggary  and  uselessness.  Giving,  pleases 
the  giver,  but  demands  much  discretion.  We  may  gen- 
erally use  most  of  our  resources  more  .successfully  by  ap- 


350  RIGHT  AND  RICHES 

plying  them  to  wise  undertakings  under  our  private  con- 
trol. But  people  are  ready  for  an  increasing  measure  of 
free  public  supply. 

The  perfect  ideal  does  not  imply  a  neglect  of  our  own 
reasonable  needs. 

Yet  the  present  necessity  for  private  ownership  and 
control  does  not  lessen  our  need  for  the  perfect  ideal. 
Such  ideal  is  absolutely  essential  to  any  useful  plan  of 
social  progress,  civic  improvement,  or  legislative  reform. 
In  proportion  as  economics  based  on  this  perfect  princi- 
ple displaces  that  based  on  greed,  men  will  become  better 
citizens  and  neighbors,  and  organized  aggression  will  be 
overcome. 

This  perfect  ideal  is  equally  essential  to  individual  busi- 
ness success,  for  the  erroneous  business  purpose  to  hinder 
others,  starts  from  the  thought  of  a  limited  supply  and  the 
necessity  to  contend  for  one's  share,  whereas,  with  the  true 
conception  of  business  one  starts  from  the  foundation 
fact  of  God's  abundant  supply,  and  works  with  the  noble 
purpose  to  make  such  supply  available  both  to  himself 
and  as  much  as  possible  to  others. 

With  this  conception  the  worker  and  salesman  will  not 
think  of  employment  and  market  as  limited,  but  will 
know  that  the  product  of  additional  workers  tends  to  sup- 
ply wages  for  more  employes  and  the  marketing  of  more 
goods  tends  to  enlarge  instead  of  contract  the  market. 
Hence  they  will  not  seek  to  limit  employment  or  market. 
Such  workers  or  salesmen  will  not  concede  the  unlimited 
power  of  adverse  influences,  but  will  contend  heroically 
against  them  knowing  that  success  may  be  won  by  prop- 
er effort,  and  that  the  true  success  of  one,  tends  to  the 
success  of  all.  To  such  we  owe  the  measure  of  prosperity 
which  at  times  prevails  against  the  confusion  of  our  so- 
cial svstem. 


PUBLISHER'S  NOTE. 


nrO    THE    READER:— If    after   having    read 
Right  and  Riches  you  believe  that  its  teachings 
tend  to  the  good  of  mankind,  we  ask  that  you  com- 
mend it  to  your  friends. 

You  and  your  friends,  and  their  friends  control 
the  destinies  of  the  Nation  and  the  world.  Hence 
you  cannot  measure  the  influence  you  may  have. 

It  takes  but  a  word  spoken,  or  written  in  a 
letter  or  on  a  post  card,  to  tell  your  friends  of  a  book 
you  like,  and  it  is  often  quite  difficult  to  select  the 
book  worth  the  time  to  read  without  some  such 
friendly  help. 

THE  WILBUR  PUBLISHING  CO.. 

PASADENA,  CALIFORNIA. 


This  book  is  DUE  on  the  last  date  stamped  below 


..„■.  „     McCasland  -  '.^^j- 

M12r  Right  and 
— riches, — 


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